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Carriers are making a last ditch attempt to raise freight rates ahead of the 2024 contract season, as carriers announced rate hikes on 1 December and 15 December 2023 with some initial success on the FE-Europe routes. However, the composite SCFI index continued to slip last week and all of the gains from the last 4 weeks have been erased with carriers making little efforts to curb capacity growth.

The heightened tensions in the Red Sea over the past week could threaten affect vessel traffic, but containership flows through the Suez Canal and the Straits of Hormuz remain fluid over the past week. The Panama Canal transit restrictions have started to impact containerships for the first time, with a rising number of ships facing delays that are set to worsen over the next 2 months. All 18 of the current FE-USEC via Panama services are using neo-panamax ships where transit quotas will be severely cut.

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Panama Canal congestion set to worsen
The number of daily neo-panamax transit slots on the Panama Canal will be cut from 8 to 5 by 1 January 2023, with a weekly limit of 35 transits. Containerships currently account for 29 weekly neo-panamax transits (before adjustment for blanked sailings) of which 18 are northbound voyages (to the US) and 11 are southbound (from the US). These containership transits account for 83% of the January transit quota, leaving just 17% of these slots to non-container ships. Congestion at Panama Canal is starting to build up with 22 containerships waiting at the end of last week, of which 14 are neo-panamax ships. Several carriers have already announced new fees for Panama transits including MSC who will impose a $297/container Panama Canal Surcharges (PCS) from 15 December 2023.

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