Canals under pressure

As SeaIntel outlined in their newsletter 3 months ago, low oilprices and high canal tolls made it feasible to re-route containerships the long way round Africa. 

Today's announcement from CMA CGM (seen here: https://www.cma-cgm.com/news/1164/cma-cgm-to-improve-its-services-connecting-north-europe-with-middle-east-and-asia-evolutions-on-fal-1-fal-23-new-fal-7-evolutions-on-epic?cat=servicesupdates ) is precisely such a development. On the return journey from North Europe to Asia, the Ocean-3 alliance carriers will take the long route round Africa, thus saving the high canal tolls in the Suez Canal. 

As long as bunker fuel prices are low, the Suez and Panama Canals will be facing an increased pressure from container lines who will quite simply look for the most cost-efficient routing. Given the major investments both canals have made to upgrade capacity, this can turn out to be a major headache.

Lars Jensen

Leading expert in the container shipping industry. Click "Follow Me" here on LinkedIn to stay updated

8 年

Its a simple matter of determining which route is most costeffectve. The beauty is that as long as the round-Africa service can be done in accordance with exactly the same schedule as you would do on a Suez routing,and provided you have no port calls enroute, then the carriers can quit simply switch from week to week depending on the oilprice versus the canal tolls.

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Mike Wackett

Shipbroker & Business Consultant

8 年

But with oil prices beginning to head north again how long before carriers take their foot off the pedal again?

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Lars Jensen

Leading expert in the container shipping industry. Click "Follow Me" here on LinkedIn to stay updated

8 年

Not quite - the transit times back to Asia are largely unchanged, they simply go faster round the Cape

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Per Starup Sennicksen

Logician | Logistician | Humanostician

8 年

Suspect it is also a reflection of the less time sensitive nature of merchandise transported - or just empty boxes - back to Asia

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