Security Crisis at Suez and Panama Canals Strains Logistics Capacity
Security Crisis at Suez and Panama Canals Strains Logistics Capacity
The security situation at the Bab el-Mandeb Strait, off the coast of Yemen, has deteriorated significantly. According to Sea-Intelligence, numerous vessels have come under attack by Houthis, prompting many major shipping companies to hold their vessels and avoid transiting the Red Sea. This has rendered the Suez route unusable for an indefinite period.
\nTrade flows, particularly from the Far East to North America's East Coast (NAEC), have been significantly impacted. Drought-related restrictions at the Panama Canal, which forced traffic to the Suez route, have now made a return to the Panama route impossible. Sailing times via the Africa route will face substantial increases.
\nSea-Intelligence forecasts transit time increases of 9 days on the Far East-Northern Europe route, 14 days for the Mediterranean (MED), and 5 days for NAEC. To maintain weekly departures on these trades, additional vessels will need to be deployed to these services.
\nAlan Murphy, CEO of Sea-Intelligence, noted that circumnavigating Africa will require 1.45 to 1.7 million TEU of ship capacity, equivalent to 5.1 to 6.0 percent of global container ship capacity.
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