NASA image of the Suez Canal, taken by MISR satellite on January 30, 2001. (PD)

 

The low fuel prices have some shipping companies thinking about skipping the shortcut through the Suez Canal and instead opting for the long route around South Africa.

The savings on Suez Canal tolls and fees would come at a time-cost, adding an extra week in transit, which isn’t for everyone.

Container ship Hanjin Kaohsiung transiting the Suez Canal. Photo by Daniel Csörföly (PD)

 

Lloyd’s List | Maritime Intelligence: Carriers could save an average of $17.7m per year per service by sailing south of Africa, if shippers would accept an extra week’s transit time on the headhaul, according to new research from SeaIntel.

October 2014: the northbound convoy is waiting in the Great Bitter Lake, the southbound convoy pass. Photo by Gregor Rom (CC 4.0)

 

To maintain market share, carriers could reroute some of the Asia-Europe services while keeping the routing through the Suez Canal for some services, so the carriers could still service those shippers that prefer a faster transit time.

Another scenario, however, could see lines start “threatening” to sail south of Africa, forcing the Suez Canal to change its pricing structure to such an extent that the routing would remain economical.

Read more from Lloyd’s List here…

posted by Mai Armstrong for the Working Harbor Committee

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