Consultant Sees Low Bunker Price Prompting Boxships to Dodge Suez and Panama

by Ship & Bunker News Team
Wednesday March 11, 2020

This week's collapse in bunker prices with crude may prompt boxships to avoid the Suez and Panama canals as they favour longer routes without the fees needed to traverse these chokepoints, according to a consultant in the container industry.

"There is a geniune risk for the Suez and Panama canals that container carriers will bypass them for some sailings and take the long route south around Africa back to Asia," Lars Jensen, CEO of SeaIntelligence Consulting, wrote on his LinkedIn page this week.

"This is what the carriers did with more than 100 sailings in late 2015 and early 2016 -- they simply sped up and took the long way around Africa while sticking to the usual schedule.

"The low oil price meant that this was more cost-efficient."

A drop in boxship calls on this scale would significantly cut bunker demand in Panama and Egypt.

Adding to the cost advantages of this plan would be the benefit of avoiding the higher charges for traversing the Panama Canal this year.

Changes including the new "freshwater charge" may add as much as 30% to the cost of passing through the canal in 2020, the International Chamber of Shipping said last month.

Ship & Bunker News Team
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