PANAMA AND SUEZ CANALS: AN OVERVIEW OF THE SITUATION

Areas of tension at the Panama and Suez Canal, two major crossing points. Since the end of August, the Panama Canal authorities have been informing us of a severe drought, forcing them to limit the number of daily ship passages and reduce their draught. The rainy season is drawing to a close, and the drought is still very much with us. The Suez Canal, meanwhile, has been hit by attacks on cargo ships in the southern Red Sea.

PANAMA SURCHARGE

The authorities have already announced a gradual reduction in the number of crossings from the current 22 per day to 18 from February 1, 2024. This situation is likely to last for some time, as congestion is already present on both sides of the Canal.

Container ships have access to passage slots by appointment, and for the moment do not seem to be affected by the congestion. However, in view of the reduced number of passages and related constraints (see our article Panama Canal: Drought and restrictions), and in anticipation of increases in Panama Canal operating tariffs, the companies have announced a “Panama surcharge“. The amount of the surcharge varies from one shipping line to another. Some will apply the surcharge from December 15, others from January 1, 2024.

It should also be noted that many ships are redirected to the Suez Canal and the Cape of Good Hope, which adds considerable time and cost to the routing of goods.

SUEZ CANAL UNDER STRAIN

The southern Red Sea is now considered a high-risk area. Faced with repeated attacks on merchant ships and the instability of the area, some companies will apply a tax called the “war tax” from January 1, 2024 on all ships transiting this area.

Indeed, several ships have recently been attacked in the Bab-El-Mandeb Strait, and some are changing their routing to avoid the Suez Canal and pass through the Cape of Good Hope. This represents a significant increase in transit time.

This tense context in international transport is a reminder of the importance of insuring your goods to limit financial losses in the event of a problem. Naturally, our teams monitor the situation very closely and always propose the most appropriate solutions.

Our teams are at your disposal to support you in all your day-to-day shipments.