The Suez Canal again came into the limelight with the blockage of trade traffic due to Ship Evergiven getting wedged at an angle between both the banks of the canal. As a result, this caused a revenue loss of a minimum of Rs 106 Crores per day to the Egyptian Government’s Exchequer as quoted by Suez Canal Authority Chief, Admiral Osama Rabea due to traffic transit disruption. [7]. The consequent losses to the international trading community in terms of monetary equivalence due to this traffic disruption, delays, circumnavigation around the Cape of Good Hope and other crisis are difficult to quantify at this time.

Furthermore, due to the pandemic, there has been a huge disruption of the flow of containers along the shipping lanes. This was due to the fact that when, trade got disrupted during the pandemic and the demand for products dropped but, the production stocks kept piling up with various manufacturers and logistics enablers. The retailers, consumers deferred their purchases due to the unforeseen pandemic witnessed by the world in the last twentyfour months. This in turn led to the piling up of empty and filled containers at inconvenient logistics choke points. As per the insurance sector experts, it caused an unnecessary cost penalty on the movement of empty containers from the loading docks or dry ports to the loading destinations. Furthermore, the disruption of the canal due to the Evergiven ship, further compounded the problems which forced many shipping companies to explore the option of transporting their goods via the Cape of Good Hope. Once the Suez Canal reopened for operations post the recent disaster, the Suez Canal Authority decided to raise the transit tariffs.

In view of the aforesaid, it is important to carry out a critical analysis of the impact of the Suez Canal Authority’s decision to selectively enhance the transit tariff by 6%. This will impact the freight costs, the insurance premium, the cost of goods sold and of course impact the cost of moving empty containers between various points on the globe.