Ships that carry grain from the United States and who regularly use the old locks also face challenges due to the situation around the Panama Canal.
Trading patterns have already undergone a major change and most of these bulk carriers are now opting for the longer route through the Suez Canal.
“Particularly for grain shipments from the US Gulf to China and Asia, the Panama Canal trade route is one that has historically been used,” said Gary Vogel, CEO of Eagle Bulk.
This route through Africa takes another 10 days and is a little more expensive than the Panama route.
Vogel stated that sailing to the US Gulf, from the Pacific side of South America, is not viable at this time.
This has led to the fact that there are fewer of them ships available to load US grain exports, which raised freight rates.
Suez is now much more important to American agriculture. US grain shipments are carried on Panamax-sized ships or smaller.
Ship position data from MarineTraffic shows that the majority of bulk carriers carrying cargo from the US in that size category now go through Suez and avoid the Panama Canal.
However, the current conflict between Israel and Hamas also raises concerns about passes through the Suez Canal.
“There are concerns about the conflict. We do not know how Egypt will react if there is an escalation and whether it will take any measures to reduce the number of commercial ships passing through the Suez Canal. That is a question for the coming months,” said Polys Hajiouannou, CEO of Safe Bulkers.
The Panama Canal crisis would have had a greater effect on U.S. agricultural exports if export volumes were higher.
Channel restrictions coincide with the reduction period American exports due to lower agricultural production and low water levels in the Mississippi River.
Another of those affected by the crisis in the channel are container ships, as well as ships for the transport of liquefied natural gas.
This week, a boater paid nearly $4 million to jump to the front of the line in the congested Panama Canal waterway, a record.
Source: Panama America
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
