The Latest on Panama and Suez Canals and Their Impact on Trans-Pacific Shipping
Panama Canal – Still pinched due to seasonally low waters. Supposedly, the conditions will allow more ships to transit starting in January, but analysts don’t expect a return to normal for months.
Suez Canal – All major carriers are diverting vessels around the Cape of Good Hope due to violence toward container ships and general unrest in the area.
Q1 Impact on Trans-Pacific Lane
- Expect rates to rise moderately through the end of February (post-Chinese New Year). Whether or not they fall after that will depend on market conditions + conditions in the canals, both of which are too far in advance to forecast with much confidence.
- Trans-Pacific spot rates were up 39% from late December to early January, per the Journal of Commerce.
- Bestway rates were only up between 20% and 30% between these same periods.
- Anything beyond February is “wait and see.” Typically, that is a time period when rates drop for at least six weeks following the post-CNY rush.
- Expecting little-to-no impact on Trans-Pacific cargo discharging at USWC ports
- The only potential impact would be LA port congestion, leading to longer rail times for IPI cargo.
- The thinking was that with the Panama Canal pinched, more people would route cargo to LA instead of USEC or the US Gulf.
- We are not forecasting this because the Panama Canal situation has been going on for a couple of months now with no significant impact on LA port congestion.
Bestway will continue to update this story as it unfolds and bring you the latest information. Trust your cargo to the experts and contact Bestway International.