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The Effective Role of Suez Canal In The World Seaborne Trade

6 th IAPH Mid-term Board & Port Forum ” “ Economic Recovery in the Maritime Trade Savannah, June 6 – 9 , 2010 The Effective Role of Suez Canal In The World Seaborne Trade Eng. Ahmed M. El-Manakhly Director of Planning & Researches Dept. Suez Canal Authority

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The Effective Role of Suez Canal In The World Seaborne Trade

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  1. 6th IAPH Mid-term Board & Port Forum ” “ Economic Recovery in the Maritime Trade Savannah, June 6 – 9 , 2010 The Effective Role of Suez Canal In The World Seaborne Trade Eng. Ahmed M. El-Manakhly Director of Planning & Researches Dept. Suez Canal Authority

  2. The Suez Canal links the Mediterranean Sea to the Red Sea. Suez Canal It was opened for international navigation on 17 th November 1869.

  3. The Characteristics of the Suez Canal ( 1869 – 2010 )

  4. The Main Advantages of the Suez Canal • Longest Canal in the world without locks. • Navigation goes day and night. • Liable to be widened and deepened when required to cope with the expansion in ship sizes of the world fleet . • The VTMS system is securing the highest standards of safety to the vessels transiting the Canal.

  5. Daily average number of transits against Suez Canal capacity Capacity 98 ships fully effective use of the By-Passes and through the change of the convoy system. Capacity 88 ships under the current transit system Capacity 78 ships Daily Average

  6. The Importance of the Suez Canal • The geographical position of the Suez Canal makes it the shortest route between East & west as compared with the Cape of Good Hope. • The Canal route achieves a saving in distance between the ports East & West the Canal, the matter that is translated into saving in time, fuel consumption and ship operating costs . • About 10% of the world seaborne trade passes through the Suez Canal.

  7. A- Saving in distance achieved by the Canal compared To Cape of God Hope

  8. B – Suez/Panama PRD is one of the two fastest growing manufacturing region in China Halifax New York Pearl River Delta Norfolk Savannah Shenzhen Hong Kong Laem Chabang Singapore Colombo

  9. Development of the Suez Canal 1- Navigational Channel 2- Equipment and Machinery 3-Safety of the Traffic and Navigational Support 4-Development of Pricing Policies

  10. 1- Development of the Navigational Channel A . From the year 1869 till the present

  11. The Present Canal 2010 96.8 % of the Bulk fleet 100 % of Container fleet 62.6 % of the Tanker fleet 100 % of Other types

  12. B. Suez canal future development projects • Increase the length of by-passes to reduce total transit time • Deepening the western by-passes to permit the passage of vessels up to 52 feet draught . • According to the result of feasibility studies , stepping up the 's draft to 72 ft to accommodate the VLCC’s .

  13. 2- Development of Equipment & Machinery MASHOUR - Cutter suction dredger 31050 hp - Year of built 1996 - Max. dredging depth 35 m

  14. Cont. Development of Equipment & Machinery Mecca Trailing SuctionHopper dredger - Hopper capacity 10000 m3 -Total installed power 25032 hp - Year of built 2004 - Max. dredging depth 35 m

  15. Cont. Development of Equipment & Machinery Ezzat Adel One of the biggest tugs of 160 bollard pull tons

  16. 3 - Safety of traffic and navigational support A- Suez Canal Vessel Traffic Management System ( VTMS )

  17. Cont. Safety of traffic and navigational support B - The Maritime Training & Simulation Centre

  18. The philosophy of the Suez Canal toll’s is based on the following considerations : 1- Comparison of the ship voyage cost through the Canal and through other alternative routes. 2- Ship type and size. 3- Market conditions and all the economic factors affecting maritime transportation. 4- Keeping the Suez Canal the first choice for customers. ** The Tolls is revised and published yearly. 4 – Development of Pricing Policies

  19. Cont. Development of Pricing Policies The regular dues can attract most of ourcustomers ,and for the rest we offer other policies as : 1-Establishing an elastic toll’s system to encourage all the potential trade to pass through the Canal: • Long- haul vessels (Case by Case) • VLCCs in ballast condition (20% reduction for ships from Caribbean and US Gulf to AG) . • Environmentally friendly vessels (2% reduction for Double Hull). • LNG carriers (35% , plus Other reductions offered to certain quantity of gas transported via the Canal)

  20. Cont. Development of Pricing Policies 2-Maintaining full complementary and coordinating policy with SUMED Pipeline. 3-Time saving service for vessels arriving after the time limit against a surcharge of 3%,5% or 10% subject to vessel’s time of arrival.

  21. Signing MOU with Georgia Ports Authority January , 2010

  22. Promoting the Suez Canal Route Suez Canal Authority signed Six Memoranda of Understanding (MOUs) with: • The Port Authority of New York & New Jersey On June 14, 2006. • Virginia Port Authority On June 21, 2006 – and updated in December 12, 2007. • Maryland Port Administration On October 2, 2006 . • Halifax Port Authority on January 15, 2009. • Georgia Ports Authority on June 2, 2008 . In January 2010 It is Updated & Extended for 5 years .

  23. Targets of the MOUs : • Promoting trade between Asia and the ECNA through the Suez Canal. • Generating business opportunities • Enhancing customer service. • Boosting economic growth

  24. Development of ECNA-Asia container traffic via Suez Canal

  25. The Economic Crisis Effect onSuez Canal

  26. The Economic Recovery Effect onSuez Canal

  27. Piracy and the Suez Canal 29

  28. The Piracy Acts of piracy had re-emerged following the end of World War II. Such criminal acts began to be practiced on a much wider scale in the 80’s, and covered many parts of the world such as the China Sea, Malacca Strait in South East Asia, the coast of Singapore, Thailand and the Philippines, Indonesia and the coast of South America ( Brazil ). The East coast of Africa, particularly the Somali coast, the Gulf of Aden as well as the Horn of Africa are in fact very hot spots so far as piracy operations are concerned. 30

  29. Piracy has spread in this part of the world as a result of the utter chaos that hit Somalia with the advent of its civil war in 1991. This area; the East Coast of Africa, is quite sensitive as it is the southern entrance to the Red Sea which is a very important trade route that leads to the Suez Canal, the route of choice for more than 30 million TEU’s per year, beside more 30% of the world demand for energy sources . The acts of piracy, along the Somali coast line which extends for more than 3300 km, used to target the fishing boats that reached the Somali territorial waters. With the development of the pirate’s capabilities, however, they started to attack commercial vessels that frequent this maritime route. 31

  30. The Impact of piracy on the Suez Canal Sea piracy has been a common practice along the Horn of Africa since 2005. However, in spite of the wide-spread of such criminal behavior, Suez Canal traffic has registered a remarkable increase in the period from 2004 to 2008. There was an increase not only in the number of transiting ships but in the net tonnage and the Suez Canal revenues as well. After 2008 the Suez Canal had started to suffer a drop in the amount of transiting tonnage and accordingly in revenues. In 2009 the transiting tonnage was 20% less than in 2008, but that was totally attributed to the economic crisis that hit the world at the time. This shows that the effect of piracy operations on Suez Canal traffic has been quite marginal. 32

  31. The Suez Canal point of view concerning Piracy Emphasize the fact that security of the Red Sea and the safety of its navigation is the responsibility of the Arab countries which share its shores. Act upon the recommendations of Sana’a conference of 2005, and the memo of understanding that was duly discussed in Muscat in January 2006. That memo was presented by the governments of both Egypt and Yemen with the purpose of setting up a Regional Information Center in Sana’a in order to exchange security information. 33

  32. Establish good balance between security requirements and facility of navigation in a way that avoids unjustified delay to international seaborne trade. Make it clear that such acts of piracy along the Somali coast represent a threat not only to the Suez Canal route but also to the alternative route around the Cape of Good Hope and all other trade routes. 34

  33. Cooperate to Fight Piracy Cooperate with EUNAFOR which had started to provide protection to commercial ships in the Gulf of Aden in 2008, and also started the distribution of maps and some guiding publications to ship masters sailing southbound to the Gulf of Aden. The printed literature includes :- A map that shows the Area of Operation (AOO), and the procedures that should be taken by the crew of the ship in case of an attack, and how to act in case the pirates could actually board the vessel. Telephones, Fax numbers and e-mail addresses to be used in emergency cases. International Recommended Transit Corridor (IRTC). Measures that should be taken before arrival to the protection area. Measures that should be taken upon attack. Self protection measures, and how to prevent pirates board the ship. How to deal with pirates if they make on board. 35

  34. Suez Canal Headquarter Ismailia The SCA spares no effort for the sake of ensuring a safe and secure service for all transiting Vessels; thus contributing to the prosperity of world trade and all nations as well. www.suezcanal.gov.eg

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