Some Ocean Imports Taking Days Longer Due to Suez, Panama Canal Disruptions, Flexport Says

Shippers of cargo from Asia to the U.S. East Coast could see shipments take five to 10 days longer as carriers avoid the Suez and Panama canals due to disruptions caused by conflict and drought, Nathan Strang of Flexport said Dec. 20.

Speaking during a Flexport webinar, Strang said carriers avoiding the Suez Canal due to attacks from Houthi rebels on cargo in the Red Sea could take five days longer to get from Asia to the East Coast by going around the Cape of Good Hope. All major carriers have paused using the Red Sea, including Maersk and Hapag-Lloyd, Anders Schulze, Flexport's global head of ocean freight, said during the webinar.

And carriers avoiding the Panama Canal after a drought there decreased capacity could take 10 days longer to get to the East Coast from Asia by going around the Cape, the Flexport executives said.

Ships also will require a much longer return trip, said Strang, Flexport's director of ocean freight for the U.S. Southwest for small businesses. As a result, there will be gaps in shipping schedules, and an "imbalance" of when ships arrive, Strang said. Shippers should start planning in advance as long as this remains an issue, he said.

Some options for alternatives include the U.S. West Coast plus rail or the U.S. West Coast plus trucking, Strang said. Those are "very reliable," and Flexport is seeing "very good standard service" for both options.

Whether shipping to the West Coast is a viable alternative may depend on where the shipment is originating. Shipments from South Korea, for example, may find it to be the better option. Shippers from India or Pakistan, on the other hand, may still find it quicker to ship their cargo around the Cape of Good Hope rather than going through West Coast ports.

As far as next steps, that depends on where the goods are in the shipping process. Flexport is recommending those with a booking stay on that booking. For next year it is best to talk to a logistics professional to try and find a solution. "Let's figure out the best solution that balances price and speed," Strang said.

"It's going to take a little bit of time for us to kind of see how these services actually even out and what the real transit times are," Strang said.

The West Coast option may lead to a slight increase in port and rail congestion, Lars Jensen, CEO for Vespucci Maritime, said during the webinar. Jensen said shippers should specifically monitor rail capacity in the Pacific Northwest.

The U.S. is launching a task force that would help secure the Suez Canal and includes the U.K., Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain, Secretary of Defense Lloyd Austin said in a Dec. 18 statement.

This plan could take "weeks" to come together, Jensen said, and could require the task force to send vessels with the technology to stop Houthi-launched missiles. Even then, Jensen said, there still would be risk.

"No missile technology is 100% foolproof," Jensen said. "So are you going to risk life and limb of your seafarers and a billion dollars worth of cargo on board the ship in the hope that they will shoot down all of those missiles?"

Jensen said he doesn't believe this will get carriers to send large cargo vessels through the canal. "This is going to take time," he said.