We're writing to update you on two major events which have major implications on container shipping worldwide.
- All carriers have paused cargo shipping through the Suez Canal
- Severe drought in Panama Canal causing 33% reduction in capacity
- Rate changes for car shipping from the US
Suez Canal Suspended Voyages
On Saturday, December 15th, the container ship MSC PALATIUM III was attacked with a missile while transiting the Red Sea. All crew are safe with no reported injuries, meanwhile the vessel suffered limited fire damage and has been taken out of service. This is the first incident where a container ship was hit.
Carriers including CMA CGM, Evergreen, Hapag-Lloyd, MSC, OOCL, Maersk and Yang Ming Line have paused shipping through Suez Canal and are rerouting vessels around Cape of Good Hope in South Africa, which increases the transit time by 20%. Suez Canal is the passage for over 30% of world container traffic so this reroute is going to cause major damage to logistics chains worldwide.
Please allow for additional transit time for vehicles shipped from our New Jersey and Florida locations to the Middle East.
Panama Canal Bottleneck
The Panama Canal has faced a severe drought this year, which has caused congestion and significant delays for cargo sailing from the Pacific to the Atlantic Ocean.
The Panama Canal capacity is still 30-40% lower than the previous year due to the drought. With the route is at peak capacity, space from California to Europe will remain limited. Our team has allocation on each vessel, and will continue monitoring the situation to limit delays for your cargo.
Rate Changes
California to Europe
Carriers have announced a Panama Canal Surcharge, with Hapag-Lloyd announcing a rate increase of $260 per 40ft container, Yang-Ming an increase of $230 per 40ft containers, and ONE Line increasing by $290 per 40ft.
We have not increased our rates because we are able to negotiate no rate increases for our customers from California to Europe.
California to the Middle East
Since the cargo sails straight through the Pacific Ocean and does not pass the Suez Canal, there are no rate increases from California to the Middle East at this time.
New Jersey & Florida to Europe
There are no rate increases at this time.
New Jersey & Florida to the Middle East
There are no rate increases at this time. However ocean carriers may announce a War Risk Surcharge. If any announcements are made, you will be the first to know.
