Panama-Suez to Be Hit by Global Shipping Crisis?

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The Panama and Suez canals could be next in line to be affected by the current container shipping crisis, as carriers take the southern African Cape of Good Hope route over both canals, which the findings of an analysis from African ports analyst portoverview.com shows, according to The Loadstar

Read: Container Trade Rates to Decline in 2016

The study showed that from October, 2015, 115 vessels were taking this route over the normal Asia-USEC and Asia-North Europe services. 

Portoverview.com is quoted as saying: “Normally, 78 of those voyages would have gone through the Suez Canal, and as 53 of the voyages were in 2015, it would have meant that the number of container vessel passing the Suez Canal in 2015 would ‘only’ have decreased by 1.9% year-on-year, instead of the reported 2.8%. The other 37 vessels would normally have passed through the Panama Canal.

“Currently, the carriers are only using the south of Africa routing on the backhaul legs and retaining the transit time, but considering the financial situation of most carriers, and keeping in mind the relative ‘ease’ with which the carriers implemented both slow-streaming and super slow streaming, going south of Africa on the head-haul is going to look very alluring for some carriers, if indeed they can re-route the cargo from the intermediate port calls.”

Overcapacity is said to be one of the reasons for ships rerouting to a different trade lane and is currently a huge issue in the shipping industry.

Watch a video interview with Olaf Merk, in which he offers four ways the industry can handle overcapacity: 

Read: US Port Begins Panama-Driven Expansion Project

Technical Paper: The Infinite Possibilities of the Suez Canal

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