Drought in the Panama Canal and a series of attacks on cargo ships in the Suez Canal could limit traffic along vital trade routes, the Financial Times said.
⠀
“There are deliveries that simply won’t arrive in time for Christmas,” the publication says.
⠀
If the situation does not change soon, the consequences for global trade will be catastrophic, the article states.
⠀
According to the Panama Canal Authority, cited by FT, October 2023 was the driest in the region in the last 70 years. Against this backdrop, authorities have for the first time reduced the number of ship passages, which will be limited to 18 per day by February.
⠀
According to the canal authority, some ships waited in line for an average of 12.2 days, and some for more than two weeks. Faced with mounting delays, companies were forced to redirect ships to more costly routes, the newspaper writes, adding that at the same time, a sudden series of attacks in Suez on ships believed to be carrying goods to Israel shook the world community.
⠀
“If passage through the Suez Canal is also obstructed, this could lead to serious disruptions,” the newspaper noted.
⠀
Thus, disruptions in the functioning of the canal will lead to an increase in the cost of goods, since prices for using the Panama Canal quickly increased to millions of dollars per vessel passage, the material says.
⠀
The Panama to Suez route change adds five days to the New York to Shanghai journey for ships, according to MDS Transmodal. If you choose the route along Africa’s Cape of Good Hope, this can add another six days to your journey. This situation has raised the question of the viability of global trade, the FT added.
