Key facts
- Shipping costs on all global lanes are skyrocketing due to re-routes and longer voyages.
- The Strait of Hormuz crisis has led to increased energy commodity cargo traffic through the Panama and Suez Canals.
- Panama Canal auction bids for passage have reached millions of dollars, with SK Gas reportedly paying $5.3 million for a September 1 transit.
- Waiting times to transit the Panama Canal for vessels without booked slots have increased to 17 days.
- The Suez Canal is also reporting a surge in revenues and oil tanker transits due to threats in the southern Red Sea and Bab el-Mandeb Strait.
Global shipping costs have surged to record highs as disruptions in the Strait of Hormuz and Bab el-Mandeb Strait force rerouting of trade, increasing traffic and fees at the Panama and Suez Canals. Vessel operators are willing to pay millions of dollars for passage through the Panama Canal, with SK Gas reportedly paying as much as $5.3 million for a single transit.
The crisis at the Strait of Hormuz, a key oil and LNG export route, has led to increased energy commodity cargo traffic through alternative chokepoints. The Panama Canal has seen its traffic capped at 32 vessels per day from September 15 due to reduced rainfall, further tightening vessel availability. Bids for passage slots in August averaged over $1 million, a 16-fold increase from a year ago.
For vessels without booked slots, waiting times at the Panama Canal have extended to 17 days, compared to just two days in February. The Suez Canal is also experiencing a surge in revenues and oil tanker transits due to threats in the southern Red Sea. The daily rate for chartering a tanker has exceeded $1 million for the first time ever, as ship owners face a tightening supply of vessels willing to navigate the Strait of Hormuz.