Optimal non-queuing pricing for the Suez Canal

Abstract

After the 2010 canal deepening project, the permissible draft through the Suez Canal was increased from 62 to 66 feet. Most types of container ships and bulk carriers can pass through the Canal. The queuing problem at the anchorage of the Canal is worsening because an increasing number of ships are willing to cross the Canal to reach their destination ports. To solve this problem, this article introduces the analytic mathematical approach to establish the optimal non-queuing toll scheme that will effectively disperse all ship arrival times to achieve equilibrium. Consequently, queuing at both entrances of the Suez Canal can be totally eliminated. The article also shows the arrival rates of all ships both before and after implementing the toll scheme. The ratio of all early (or delayed) arrivals to the total number of ships passing through the Canal before tolling will be identical to that after tolling.