Egypt to give incentives for U.S.-bound ships to use the Suez Canal




CAIRO: Egypt, seeking to profit from growing Asian exports to the United States, plans to provide incentives for ships to use the Suez Canal instead of sending goods to West Coast ports or through the Panama Canal.

"We want to lure more containers into using the U.S. East Coast ports via Suez," Admiral Ahmed Fadel, the chairman of the Suez Canal Authority, said earlier this month. "We will give service with competitive and lower prices."

The authority, whose canal links the Red Sea to the Mediterranean, is strengthening ties with U.S. East Coast terminals, including the Port of Hampton Roads in Virginia, before the Panama Canal completes a seven-year, $5.2 billion expansion that will increase its capacity. More than 18,000 ships passed through the Suez Canal last year, compared with an annual average of 14,000 for the Panama Canal.

Chinese exports to the United States rose to $287.8 billion last year from $100 billion in 2000, according to the U.S. Census Bureau. The Suez handles less than 6 percent of the containers traveling between Asia and the United States, with the rest going to the West Coast, where they are carried inland by rail and truck or transferred to smaller ships able to navigate the Panama Canal.

With delays, strikes and costs for inland transport rising, Suez would offer a direct all-water route to the East Coast, said Fadel, the former head of the Egyptian Navy.

The International Longshore and Warehouse Union, mainly representing dockworkers on the U.S. West Coast, and the Pacific Maritime Association, representing employers, will negotiate new contracts next year. Talks in 2002 led to service disruptions in Los Angeles and Long Beach, California.

Suez gets 3,000 to 5,000 containers a week from trade between Asia and the United States, out of a total of more than 79,000, according to the Transpacific Stabilization Agreement, a group representing 14 carriers.

Trade from Asia increased the Suez's container tonnage 19 percent in the year ended in November, bolstering revenue by 20 percent to a record $4.2 billion.

The canal, which has offered 35 percent discounts for gas tankers heading from the Gulf to Europe, can handle the biggest container ships.

The Suez has a two-way passage and can accommodate vessels carrying as many as 14,000 containers. That represents about 171,000 metric tons of manufactured goods, three times more than the Panama Canal's maximum capacity. Most container ships can carry no more than 9,000 boxes.