Vessels Being Re-routed Amid Panama Canal & Red Sea Concerns

Confidence in the Panama Canal's ability to handle container vessel transits has plummeted in recent weeks, leading to a significant shift in shipping routes. Many Asia-North America East Coast sailings opt to bypass the Panama Canal and take longer routes through the Suez Canal and Indian Ocean.

However, expectations that this shift would boost traffic through the Suez Canal have been dampened by recent attacks on commercial shipping by Houthi rebels near Yemen. These attacks, such as the drone strike on the OOCL boxship Number 9, have raised safety concerns. Ultimately, the conflict could significantly reduce traffic through both canals.

“It seems many vessels that had originally planned to utilize a divergent route through the Suez Canal are now avoiding the area for fear of the safety of their crew and the vessels,” said eeSea operations and forecasting analyst Destine Ozuygur.

Ozuygur notes that diversions occur on both head haul and backhaul vessel voyages. “Prior to the recent attacks on commercial vessels, we primarily saw divergent passage through the Suez on the back-haul for vessels on the Trans-Pacific tradelane. Now the Cape of Good Hope can expect to see an uptick in traffic from vessels traversing both Trans-Pacific and Asia-Europe tradelanes in either direction,” she said.

According to eeSea analysts, there are indications that vessels from THE Alliance's EC1 service are diverting from established routes towards the Cape, with more expected to follow suit. While this shift might cause delays and congestion, the development could benefit ocean carriers as the longer journey absorbs excess capacity while presenting an opportunity to apply surcharges.

Source: The Loadstar