Maritime experts to discuss $8 billion Suez Canal expansion and what it may mean for maritme trade and regional investment
The eighth edition of the biennial Seatrade Maritime Middle East (SMME) exhibition and conference, which takes place in Dubai from 31 October to 2 November 2016, will debate the latest issues surrounding the new $8 billion Suez Canal expansion and the consequences for the global maritime industry.
SMME, a part of Dubai Maritime Week, will begin the opening afternoon session of the three-day conference and exhibition, with a panel discussion led by HE Admiral Mohab Mohamed Mameesh, Chairman and Managing Director of the Suez Canal AuthorityChairman, SCA. A panel of experts will examine what the new Suez Canal development means global trade, canal transits, inward investment and the development of the Egyptian economy.
“The Suez Canal is integral to maritime development in the Middle East and naturally at a time when the shipping industry is facing a challenging economic climate, the issues surrounding trade, shipping markets, infrastructure and investment are bound to stimulate lively debate,” said Chris Hayman, Chairman, Seatrade.
The new Suez Canal project which opened on August 6, 2015, includes a 35km parallel waterway, which runs alongside the original canal. In addition, 37km of the existing canal was made broader and deeper, to reduce transit times by up to seven hours for vessels travelling south and it now accommodates ships traveling in both directions along all 72km of the expanded route.
The Suez Canal Authority (SCA) expects to receive toll revenue of $13 billion annually by 2023, but revenue in 2015 actually dropped to $5.175 billion a 5.3% decline on 2014 revenues, due to market conditions. However, according to HE Mohab Mameesh, year-on-year revenue to 6 August 2016 showed a 4% increase to $3.18 billion up from $ 3.06 billion, despite slowing trade.
An acceleration in the growth of world trade volume will be needed for the Suez Canal project to reach its revenue targets by 2023,
Some container lines, as well as tankers and bulk carriers on some itineraries, are still opting to sail via the Cape of Good Hope, even though the distance is 12,412 nautical miles (nm) from New York, compared to 10,117 nm via the Suez Canal, due to lower operating costs and low bunker prices.
“The SCA also faces renewed competition from the widened Panama Canal, which is looking to regain some of the Asia-US East Coast container trade it has previously lost to the Suez Canal,” commented Hayman.
So in a bid to recapture traffic, the SCA confirmed in June that all containerships coming from ports north of the Port of Norfolk (Virginia) on the US East Coast and heading to Malaysia’s Port Klang and ports eastwards were eligible for a 45% rebate on canal tolls up to December 31, 2016. Vessels departing from ports south of Norfolk and calling at Port Klang and eastwards can claim a 65% discount.
Other sweeteners have been added such as the an “experimental” new toll for Very Large Crude Carriers (VLCCs) transiting the canal from the Red Sea, which could save the ship’s operator in excess of $70,000 for each northbound trip from the Middle East to the Mediterranean.
Naturally, increased traffic through the new canal, will benefit ports throughout the Arabian Peninsula and the GCC countries continue to invest heavily in port infrastructure.
The government of Oman has invested more than $15 billion in the Sohar Port and Freezone, Qatar is building the $7.4 billion Hamad Greenfield Port project, Dubai will invest $850 million to develop Container Terminal 3 at Jebel Ali Port, and Saudi Arabia has committed $500 million to Saudi Global Ports (SGP) Container Terminal at Dammam King Abdul Aziz Port.
Held under the patronage of HH Sheikh Hamdan bin Mohamed bin Rashid Al Maktoum, Crown Prince of Dubai, SMME is the largest maritime event in the regional calendar
More than 7,000 participants from 67 countries are expected throughout the show, which is set to evaluate current market challenges, alongside a series of technical forums in association with IMarEST.
Over 240 exhibitors from more than 30 countries will also be represented on the exhibition floor this year, which extends to over 4,300 square metres – Japan, Denmark, Qatar, Singapore are participating with dedicated country pavilions. Major delegations from Saudi Arabia, UK, Egypt and China, will be visiting the 61st International Shipsuppliers & Services Association’s (ISSA) Convention, which is a partner of SMME 2016.
About UBM’s maritime portfolio –connecting customers globally:
UBM is one of the world’s leading B2B events organisers providing vibrant and dynamic events enriched with digital and print media. Its events allow its customers to make connections and do business efficiently and effectively.
UBM has three principle businesses: UBM Americas, UBM Asia and UBM EMEA who together provide high quality Events and OMS activities through regional focus, closely collaborating when brands extend globally. UBM is the largest “pure-play” exhibitions organiser in the world, No.1 International Exhibitions organiser in China, India and Malaysia (Asia) and No.1 Exhibitions organiser in the US.
Included within the UBM maritime portfolio is: Sea Asia; Seatrade Maritime Middle East; Seatrade Offshore Marine & Workboats Middle East; Seatrade Maritime Awards Middle East, Indian Subcontinent & Africa and Seatrade Maritime Awards Asia; Marintec South America; Offshore Marintec Russia; Marintec Indonesia; Marintec China, Sea Japan and Expomaritt.
Seatrade, an integral portfolio within UBM provides a range of global exhibitions, conference, events, awards, news websites and publications that covers every aspect of the cruise and maritime industries.
Founded in 1970, Seatrade connects people and creates opportunities for companies to develop new business, meet customers, launch new products, promote brands and expand markets.
The Seatrade portfolio is headquartered in Colchester, UK, and globally represented across 23 countries from the UAE and Asia to South America and across Europe. From Singapore, both the Sea Asia and Seatrade Maritime Awards Asia are managed under the umbrella of UBM Asia, the largest trade show organiser in the region, and the largest commercial organiser in China, India and Malaysia.
Seatrade Maritime Review and Seatrade Maritime News are the official titles in print and online for all the UBM maritime portfolio, as well as associated events: Posidonia and gmec.