More Liner Services Avoiding Canals To Head For The Cape

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Confidence in the Panama Canal to process container vessel transits appears to have completely bombed over the past week, and there have been widespread diversions of Asia-North America east coast sailings to Suez and Indian Ocean routes, reports the Loadstar.

Increase in vessels transiting the Suez Canal have been dented

Multiple carriers have revealed changes to imminent voyages by removing the Panama Canal, signalling a continued loss of confidence in the passage in the weeks to come,” eeSea operations and forecasting analyst Destine Ozuygur told The Loadstar. “THE Alliance’s EC6 service, for example, has six vessels that are all indicating diversions to the Suez Canal as far out as mid-January.”

Another service well known for its diversions, which we mentioned last week, is Ocean Alliance’s AWE5, which has temporarily dropped Panama from its vessel schedules,” she added.

However, expectations that this might result in an increase in vessels transiting the Suez Canal have been dented by the recent attacks on commercial shipping by Houthi rebels, off the coast of Yemen – in the latest incident, OOCL boxship Number 9 was the subject of a drone attack, for which the militants claimed responsibility.

Significant downturn of traffic

It seems many vessels that had originally planned to utilise a divergent route through the Suez Canal are now avoiding the area for fear of the safety of their crew and the vessels,” Ms Ozuygur said, adding that the conflict could significantly reduce traffic through both canals.

For the first time in recent memory we could possibly see a significant downturn of traffic through the Suez and the Panama canals, with a high volume of vessels preferring passage past the Cape of Good Hope.”

These diversions are now being seen 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 yranspacific tradelane. Now the Cape of Good Hope can expect to see an uptick in traffic from vessels traversing both transpacific and Asia-Europe tradelanes in either direction,” she said.

More diversions expected

According to eeSea analysts, there are 12 vessels on The Alliance’s EC1 service expected to divert from their established routes over the coming week – three have already been confirmed heading towards the Cape, based on their trajectory and positional data.

The rest, for now, still appear to advertise Suez in their voyage schedules, but the situation is developing and we expect more to make the switch soon,” said Ms Ozuygur. “For now the service does not explicitly reference the Cape, but does show direct tracks between Manzanillo and Busan – the only possible route being past the Horn of Africa.”

This morning, eeSea data showed a queue of seven vessels waiting to transit the Panama Canal, one in transit and a further 15 at anchor in surrounding port areas; at Suez, there are seven vessels waiting for passage and two in transit, while 21 vessels are confirmed to arrive within the next week at the Cape of Good Hope. But “we expect to see this number rise as we definitively pinpoint more diversions in the following weeks”, she added.

One silver lining for carriers is that the extra sailing distance will go some way to “soaking up” the overcapacity they are struggling with, as well as presenting the opportunity to apply a variety of surcharges, which might mitigate the rock-bottom rates available on the market.

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Source: The Loadstar

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