Media report: Global shipping faces disruptions as Panama Canal crisis unfolds

Container xChange, a prominent online platform for container logistics, sheds light on the extensive impact of the ongoing Panama Canal crisis on global trade and the container shipping industry. Christian Roeloffs, CEO of Container xChange, notes the varied consequences, stating, "The Dry Bulk and LNG segments have experienced the greatest impact due to restricted transits, primarily because they don’t adhere to a fixed liner schedule but instead 'arrive at the canal on an ad hoc basis.”

While the transit reductions have had minimal impact on the shipping lines, the draught reductions seemed to create a more significant impact. The draught has reduced from a maximum of 50 feet to just 44 feet. Each foot of lower draught results in a loss of 400 TEU capacity, which affects the average container vessel's capacity by 2400 TEU.

The immediate impact includes a halved number of vessels passing through the canal, leading to rerouting, blank sailings, longer transit times, and potentially higher shipping costs. The ongoing challenges are expected to continue well into 2024.

The Panama Canal Authority reports a significant increase in the average daily queue for non-booked vessels waiting for transit, reaching 9.3 days for northbound vessels and 10.5 days for southbound vessels as of November 28, 2023.

Roeloffs emphasizes that the demand lull has eased the pressure on the Panama Canal and the possible impact on the Western market. However, he anticipates increased pressure on the US East Coast, the Suez Canal, and the Cape Horn in the coming months as shippers explore alternative routes to prevent supply chain disruptions.

To cope with disruptions, major shipping companies impose Panama Canal surcharges. MSC will impose a US$297/container Panama Canal Surcharge (PCS) from December 15, 2023. Other carriers, including CMA CGM, COSCO SHIPPING, and Hapag-Lloyd, announce surcharges ranging from $130 to $297 per TEU, effective January 1, 2024. The repercussions are expected to extend into 2024, potentially impacting container prices and global supply chains.