WSS Suez Canal Team Cuts Costs and Confusion - Global Trade Magazine
  September 9th, 2016 | Written by

WSS Suez Canal Team Cuts Costs and Confusion

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  • The Suez Canal rebate system is stringent, yet generous.
  • Suez Canal reductions usually range from between five and 35 percent.
  • The Suez Canal rebate system can be complex and confusing.

Wilhelmsen Ships Service (WSS) has established a dedicated local transit team to help its customers negotiate the Suez Canal and also the complex rebate system designed to boost traffic through the recently expanded waterway.

The new office, based in Alexandria, is staffed 24/7 by local agents who intimately understand both customer requirements and the workings of the Suez Canal Authority (SCA).

The canal expansion opened in August last year, cutting vessel waiting time from 11 to three hours and potentially doubling the number of daily transits. In an effort to incentivize shippers to choose its route over alternatives, SCA has created a rebate system capable of greatly reducing vessel toll fees, if all application criteria are satisfied.

“This is a great scheme, with huge potential benefits,” commented Steffen Langlete, Product Manager, Ships Agency WSS, “but it can be complex, time-consuming and confusing to understand. SCA has strict deadlines with regard to submitting applications and the confirmation of rebates, while the documentation required is extensive. If shippers forget to apply at the right time, or fail to submit the correct papers, their rebates may not be forthcoming and, in an era of tight margins and pressure on costs, this can be a heavy price to pay.”

The SCA system is stringent, yet generous. Depending on an array of route and cargo variables, toll reductions typically range between five percent and 35 percent. However, the biggest savings come for container vessels trading between ports south of Norfolk, Virginia and ports lying to the east of Port Kelang, Malaysia obtaining rebates of up to 65%. Rebates are calculated on a case-by-case basis and are also subject to factors such as freight rates, hire rates and bunker prices.

For example, among the numerous rebates WSS has secured for its customers since the expanded canal opened, a 38,000 DWT general cargo ship recently received a $50,000 discount on its original $180,000 transit fee. Loading in Huelva, Spain and discharging in Fangscheng, China, this considerable rebate could have, and often does go, unclaimed by customers unable or unaware of the paperwork and timings required by the SCA.

Applications must be received by SCA 48 hours prior to a vessel’s departure from its most recent port of origin before entering the canal, while a range of original documents are required post-transit.

“For many shipowners and operators keeping track of requirements and relevant documentation is a real headache,” said Langlete. “In some cases, owners and operators simply forget to apply in time. In addition, any submission outside the SCA’s parameters renders an application null and void, while operators have to confirm an acceptance of the rebate within just 72 hours of it being granted. It can be difficult to stay on top of everything at once.”

That’s why WSS created its expert Suez Canal team. “It means that shipping businesses can focus on what’s important to them—getting cargoes from A to B in the quickest, safest and most efficient manner—while we can take the strain of all the paperwork, interaction with authorities, and transactions,” said Langlete. “We’re simplifying the process, while also providing additional local services, such as delay updates, advice on new regulations, canal maintenance news, and more.”

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