The turmoil at both ends of the Suez and Panama passage have forced containerships to divert from their regular routes, as ships linked to Israeli interests are avoiding the Red Sea passage through the Suez Canal even as some of te neo-panamax ships on the Far East-US East routes are shifting to the Suez route to avoid the congested Panama Canal. While these moves will help to absorb some of the surplus ships, the impact is limited at this stage as it affects less than 2% of the overall fleet.
Idle capacity has continued to drop with all ships of over 4,000 teu currently fully deployed, with carriers showing little appetite to remove surplus capacity in large numbers. Despite the initial success in raising spot rates, average CCFI rates are still 4% lower in the 4th quarter compared to the previous quarter, with the new 2024 contacts still expected to reset some 10-20% below the 2023 levels.
Linerlytica
Panama Canal congestion set to worsen
The missile attack on an OOCL operated ship on 3 December has broadened the threat to all ships passing through the Red Sea, even those that have no links to Israel. Zim has already diverted its ships from the Suez to the longer Cape of Good Hope, while Maersk has also diverted 2 ships chartered from Israeli interests following the attack on the CMA CGM SYMI on 25 November. The 4,253 teu NUMBER 9 that was targeted by the missile fired from Houthi controlled areas in Yemen is owned by US based interests and has been chartered by China’s OOCL since April 2022 after ending a previous charter with Zim.
Of the 653 containerships with a total capacity of 8.25m teu currently using the Suez Canal based on Linerlytica’s data, only 8 of these are operated by Israeli carriers and 29 are owned by Israeli-related interests. The impact of the current ship diversions are minimal at this point but any escalation in the threat to vessel safety on the Suez will have a larger impact as 30% of total containership capacity will be affected.
Weekly/Monthly Market Pulse: US$1,500/US$1,800 per year