The Panama Canal is currently under drought restriction, which has caused an implementation of surcharges which has increased pricing on Asia–US East Coast routings by several hundred dollars per FEU. Meanwhile, a Hapag-Lloyd vessel in the Red Sea was struck by a missile, following a near-miss of a Maersk ship in the same area last week, according to the Journal of Commerce.
Platts reported that in the previous week, the spot rate for shipping from Asia to the East Coast was $2,475 per FEU, while the West Coast rate was $1,687 per FEU, resulting in a $788 per FEU spread. This represents an increase from the $500 spread noted as recently as Nov. 3. If the gap in spot rates between the East and West coasts continues to widen, it may lead to a greater inclination among importers to redirect their shipments through the West Coast.
Kurt McElroy, the Executive Vice President of forwarder Kerry Apex, disclosed that numerous carriers are considering the imposition of Panama Canal surcharges. These surcharges, set to commence on January 1, have the potential to augment base spot rates by an additional $400 to $500 per FEU.
Adding to rising tensions, all-water routes from Asia to the East Coast, encompassing both the Panama and Suez canals, are in jeopardy. Following the dangerous conditions encountered in the Red Sea last week, Hapag-Lloyd declared their decision to cease using the Suez Canal and redirect their ships through the Cape of Good Hope in Africa. Hapag and various other carriers have declared a temporary halt to shipments via the Suez Canal. We will keep a vigilant eye on developments in this regard.
A. N. Deringer, Inc. will continue to monitor the situation and furnish updates as they unfold.
For more information, please visit Journal of Commerce.