May 27, 2024

Athens News

News in English from Greece

Global supply chains in chaos: Suez, Panama – who wins

Global supply chains are in chaos following the wars in Ukraine and the closure of the Suez Canal, as well as problems at the Panama Canal caused by drought, which is preventing fully loaded ships from passing through.

According to global media reports, in November, transit through the Panama Canal fell to 20 ships per day, which further affected all four main categories of ships: cargo, tankers, container ships and LNG.

It seems that everything and everyone is “working” in favor of the colossal Russian Northern Sea Route project from the Atlantic to the Arctic to northern Russia, with the final destination being Asia, and vice versa.

Russia is creating an “ice road” through the Northern Sea Route and literally “turning off” the Suez Canal, because this route reduces the time of transporting goods from China to Europe and back by 2.5 times.

This is a project with new railways, roads, pipelines, ports and nuclear icebreakers to support the Arctic route year-round.

In particular, a huge port with a total cost of 100 billion dollars is being created on the Taimyr Peninsula! The new route will connect Europe with Asia in just 19 days, compared to the 48 days it currently takes to travel through the Suez Canal.

In addition, 100 million tons of oil will be transported along it by 2030! Container shipping rates between Europe and Asia have already nearly doubled, from about $1,400 per day per container to $2,500. The crisis will periodically give a greater boost to freight rates, which will increase significantly if this situation continues for several months. Delays in the delivery of containers and cargo in general are inevitable.

The disruption to the grain trade is also expected to be more severe than any other commodity when it comes to the movement of bulk cargo by cargo ships. Increasing voyage times on major routes affected if ships diverge to alternative route points such as the Cape of Good Hope: andfrom the Black Sea to China 55 days instead of 31 (acceleration by 77%).

Global supply chains in chaos: Suez, Panama - who wins

  • From the Baltic to India (fewer days than the Russian route to the same destination): 44 days instead of 27 (63% faster).
  • Route from India to Northern Europe: 38 days instead of 24 (58% faster).
  • From the Persian Gulf to Northern Europe: 40 days instead of 23 (74% faster).
  • From the Persian Gulf to the Mediterranean: 39 days instead of 17 (acceleration by 129%).
  • From the Mediterranean to Southeast Asia: 40 days instead of 23 (74% faster).

What’s next? Richer shipowners, poorer consumers and, as a result, lower consumption as prices rose…

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