The Suez Canal Authority has taken action to stem losing traffic amid a swathe of liners opting to travel via the Cape of Good Hope, soaking up capacity, bolstered by cheap bunker bills and avoiding the tolls which tend to be in excess of $500,000 per transit.
Splash first reported how CMA CGM had started routing ships via South Africa instead of transiting the 151-year-old canal with many other lines following suit in the last few weeks as shown clearly in this one-week-old graphic from MarineTraffic.
More #ULCV's are taking longer route from #Asia to #Europe and vice versa, as seen in this heat map we created of ULCV journeys over last 30 days.
Drop in #oilprices means giant #container ships choosing to round the Cape, rather than through Suez where tolls can be expensive. pic.twitter.com/EJ8vHkL0Jo
— MarineTraffic (@MarineTraffic) April 24, 2020
The last time the canal faced a similar moment with liners voting with their feet was in 2016 when it was forced to drop fees for ships heading to Asia from the east coast of the US.
Similarly this time, the canal authority has given the greatest fee cuts for ships heading east from North America’s eastern seaboard with a sizeable reduction of up to 75% in tolls while boxships heading to Asia from Algericas, Tangiers and North Europe will get a 17% cut and ships heading from northwest Europe have been offered a modest 6% cut. The toll reductions start today and last through to the end of June.
Earlier this week the Panama Canal announced a temporary adjustment to its reservation system to help clients struggling with the downturn brought about by the spread of coronavirus.
Effective May 4, the waterway will implement temporary changes to the requirements for the placement of booking guarantees and advance payment of reservation fees when the reservation is confirmed. Customers will be allowed to place the guarantee for the payment of the booking slot prior to the vessel initiating transit.