Asia Pacific Trade hit by Panama and Suez disruptions

Industry globally faces export delays to the EU and US because of disruption at the Panama and Suez canals because of drought in one case and war in another.

Yemen’s Houthi forces have declared their intention to target all ships heading to Israel, regardless of nationality with the latest vessel to be hit being a Hapag Lloyd container ship. It issued a warning to all international shipping companies against dealing with Israeli ports.

The Gazan war has prompted many cargo ships to avoid the Suez Canal, a vital shipping route connecting Asia with the European market. The distance from the Suez Canal to Gaza is less than 120 miles.

The Panama Canal, another crucial trade route for Asia Pacific commodities to the US market, is facing its worst-ever drought, causing delays of up to four weeks for containerships carrying Christmas items – including Apple’s new iPhones, TVs, exercise bikes, clothes, and tree lights.

Shipping companies are grappling with delivery delays and additional costs resulting from disruptions in the two canals and have started imposing exorbitant surcharges to not just offset these costs but potentially also leverage off the situation to increase revenue and profitability.

This latest development is also making organisations rethink their desire to switch from air to ocean freight.