An 8,000-kilometer detour by a gas tanker has brought to light the toll that war and climate change are taking on the maritime industry, says an article published on economic times website.
Summary
- The 8,000-kilometer detour of the Pacific Weihai gas tanker underscores the impact of war and climate change on the shipping industry.
- The Pacific Weihai, carrying LPG, faces an extended journey of 35 days, covering 8,000 kilometers, and potentially facing a high shipping cost of $1800,000.
- The usual route through the Panama Canal is disrupted by droughts and increased attacks on commercial ships in the Red Sea.
- The tanker is now heading towards the Cape of Good Hope around Africa, a route that is 15 days longer than the Panama Canal.
- These detours could increase shipping costs by over 15%.
- The Pacific Weihai is owned by China-based Pacific Gas.
The Pacific Weihai’s Journey
On December 14, the Pacific Weihai, a vessel loaded with liquefied petroleum gas (LPG), embarked on a journey from Houston to Ningbo, China. The typical 30-day journey was disrupted by geopolitical and environmental factors, resulting in an extended 35-day trip, covering an additional 8,000 kilometers, and potentially facing a hefty $1.8 million in shipping rates.
The Panama Canal And The Red Sea
Normally, the LPG travels from US shale fields to Chinese plastics-making refineries via the Panama Canal, a journey that spans about 20,000 kilometers and takes roughly 30 days. However, this year, droughts in the region have lowered the water levels, limiting the number of ships that can traverse it and leading to long queues.
The Pacific Weihai initially planned to use the Suez Canal in Egypt as an alternative route, which would have added 10 days to the journey but reduced the risk of delays. However, this plan was thwarted by escalating attacks on commercial ships in the Red Sea by Iran-backed Houthi rebels.
The New Route And Its Implications
On December 18, the tanker diverted its path from the Suez and is now headed for the Cape of Good Hope around Africa, a route that’s 15 days longer than the Panama Canal, according to Ciaran Tyler, an analyst at shipping intelligence firm Kpler.
Such detours could inflate shipping costs by more than 15%, as suggested by an S&P Global Market Intelligence report published on December 26. The cost of chartering a gas tanker for the US Gulf-to-North Asia route on December 14 was $123,000 a day, or about $1.8 million for 15 days, according to Baltic Exchange data.
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Source: economics times
