As we have reported on previously, drought restrictions at the Panama Canal are continuing to impact ocean transit from Asia to the East Coast. As a result, many vendors who ship on this lane have been considering other options to ensure their goods arrive at their destination on time.
The most direct option is to ship to a West Coast port and truck or rail the containers overland. However, given the occasional West Coast port delay, continuing rail congestion, and seasonal weather impacts on overland trucking, not to mention cost, this is not always a perfect solution. Another option that has attracted some attention in recent months has been to sail with container vessels headed west from Asia, via the Suez Canal and the Mediterranean, to still arrive direct to East Coast ports. This option comes with its own costs and an increase in time on the water, but had also, historically, been reliable.
However, recent reports of hijacking attempts and missile attacks on commercial shipping vessels through the Red Sea, which leads to the Suez, have significantly disrupted passage options through the region. As a result, multiple European-based steamship lines and vessels have started diverting away from the Red Sea and the Suez, instead going the long way around Africa via the Cape of Good Hope. This can significantly impact goods transiting this route.
According to data collected by the US Naval Institute, taking the longer, southern route adds about 8-12 days of extra transit time. Further, additional affects could include vessels and containers being out of position, throwing off schedules and creating unforeseen delays.
That said, per online tracking data, the vast majority of shipping traffic is still going through the Red Sea and Suez Canal as planned, so these diversions may not impact your project directly. Further, it is expected that the Pentagon will announce an expanded ship protection initiative this week, which could help re-open the region to safe passage.
Please reach out to your freight manager if you have any questions. We are continuing to monitor vessels and container routes, and with our weekly container reports provided by our Coordinating Team, we plan to keep all parties aware of any changes to predicted schedules and any delays re-routing may cause.