Egypt's Suez Canal feels the heat as piracy spikes - Mercedes-Benz Forum

LinkBack Thread Tools Display Modes
post #1 of 1 (permalink) Old 11-25-2008, 11:03 AM Thread Starter
CH4S Artist
Teutone's Avatar
Date registered: Sep 2004
Vehicle: 1985 500SEC, 1991 190E 2.6.
Location: Los Angeles / Hannover Germany
Posts: 33,442
Mentioned: 11 Post(s)
Quoted: 937 Post(s)
Lifetime Premium Member
(Thread Starter)
Egypt's Suez Canal feels the heat as piracy spikes

Egypt's Suez Canal feels the heat as piracy spikes

By MAGGIE MICHAEL, Associated Press Writer Maggie Michael

AP – Cargo ships are seen going through the Suez Canal towards the Red Sea, in Ismailia, Egypt, Monday, Nov. … CAIRO, Egypt – The Suez Canal, a vital shortcut between East and West for nearly 140 years, is facing an enormous challenge, as the scourge of Somali piracy prompts major shipping companies to seek another route.

Egypt, which is heavily dependent on the fees it charges ships to go through the Canal, has expressed concern over a possible drop in income — though it says it's hopeful an international flotilla patrolling the pirate-infested waters will be able to ensure safe passage.

"For sure it will have a bad effect" if it continues, Gen. Ahmed Fadel, head of the Suez Canal Authority, told The Associated Press Monday at his office overlooking the canal.

At least two shipping companies have announced their vessels will take the long route around the southern tip of Africa rather than go through the canal, which requires crossing through the Gulf of Aden, scene of most pirate attacks.

The 120-mile (193-kilometer) long canal gives a vital shortcut linking the U.S. and Europe with the Indian Ocean and its Asian ports. The canal runs between the Mediterranean and the Red Sea, where there have been no pirate attacks. But the only access from the Red Sea to the Indian Ocean is through the Gulf of Aden, where Somali pirates have hijacked more than three dozen ships and attacked dozens more so far.

"One or two more piracy attacks will just send an alarm, and we will find ourselves with a big problem," said Adel Lami, chairman of Port Said Navigation Chamber, a body that represents private maritime companies on the northern tip of Suez Canal.

To avoid the Gulf of Aden, Europe's largest shipping firm A.P. Moller-Maersk A/S said last week it was telling some of its slower ships to sail around Africa's Cape of Good Hope, and Norwegian shipping group Odfjell SE ordered its more than 90 tankers to do the same. That means adding up to two weeks to some voyages.

Other firms, including one of the world's largest oil tanker companies, Frontline Ltd., have said they are considering other options, including traveling around the Cape — even though such a move would extend the trip by 40 percent.

Fadel, of the Suez Canal, played down the practicality of the South African route.

"It is not easy or simple to divert through the Cape," he said. "It will lead to an increase in commodities transport fees to more than 30 percent."

In fiscal year 2008, Egypt earned $5 billion in canal fees — up from $4.6 billion the previous year — making it the country's third largest revenue generator after tourism and remittances from expatriate workers.

But for Egypt, a country of 76 million where 20 percent live on just $2 a day, even a slight dip in canal revenue could have a devastating effect on the economy — especially at a time when the global economic meltdown is sure to hamper the country's vast tourism industry.

So far, Egypt has urged the international community to strengthen its anti-piracy efforts in the Gulf of Aden, without raising the possibility of adding ships from its 20,000-member navy to the fight.

Even before the latest soar in piracy, the Canal, which Egypt nationalized in 1956, was seeing a small decline in revenue in recent months, mostly due to a decreasing demand for shipped goods.

In September, revenues dropped slightly by about $5 million compared with August. Then in October, Suez revenue dipped even further, to $467.5 million, Fadel said.

So far this month, 61 ships have passed through the canal — one short of the monthly average, Fadel said.

To compensate, Egypt has taken a few steps to try to boost traffic through the Canal, including decreasing its fees for dry cargo ships, Fadel said.

"Since we are competing with an alternative route, we are setting up a mechanism to reduce fees," he said. "It will make it cheaper. Though revenues will be less — it is better than nothing."
Teutone is offline  
Sponsored Links

  Mercedes-Benz Forum > General Mercedes-Benz Forums > Off-Topic

Quick Reply

Register Now

In order to be able to post messages on the Mercedes-Benz Forum forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Please enter a password for your user account. Note that passwords are case-sensitive.


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:


  • Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
    Thread Tools
    Show Printable Version Show Printable Version
    Email this Page Email this Page
    Display Modes
    Linear Mode Linear Mode

    Similar Threads
    Topic Author Forum Replies Last Post
    Piracy? eric242340 Off-Topic 22 11-20-2008 06:08 AM
    Far Canal Von Vorschlag Off-Topic 0 07-07-2008 08:08 AM
    Temperature spikes while at idle dwinfield10 W123 E,CE,D,CD,TD,TE Class 7 04-04-2008 03:51 AM
    SL in a canal smack R/C107 SL/SLC Class 3 12-11-2007 10:07 AM
    Getting very tough on piracy ThrillKill Off-Topic 1 09-09-2007 01:04 PM

    Posting Rules  
    You may post new threads
    You may post replies
    You may not post attachments
    You may not edit your posts

    BB code is On
    Smilies are On
    [IMG] code is On
    HTML code is Off
    Trackbacks are On
    Pingbacks are On
    Refbacks are On


    Title goes here

    video goes here
    description goes here. Read Full Story
    For the best viewing experience please update your browser to Google Chrome