Maritime Law Column: A Tale of Two Canals
The simultaneous delays at the Suez and Panama Canals are unprecedented and assuredly will lead to higher transportation costs that will flow down to consumers.
January 04, 2024 at 02:00 PM
5 minute read
Cargo and ShippingOrdinarily, over 36,000 merchant ships pass through the Suez and Panama Canals each year representing about 30% of the world's merchant fleet tonnage. This year, both canals face extraordinary events beyond their control, which are affecting vessel transits and arrivals across the globe. Following Hamas' attack on Israeli citizens and Israel's retaliatory response, Houthi rebels in Yemen funded by Iran have launched missile and drone attacks on merchant ships in the Gulf of Aden (Gulf) as they enter and depart the Red Sea. In response to these attacks, numerous major container carriers, as well as major oil and gas tanker operators and car carriers have suspended transits through the Gulf, and the United States is spearheading a multinational task force (Operation Prosperity Guardian) now heading toward the Gulf to protect the world's merchant fleet. Meanwhile, the Panama Canal's Lake Gatun is suffering from an unprecedented drought causing significant delays for vessels transiting between the Gulf of Mexico and Pacific Ocean. Currently, traffic flow is about 75% of normal capacity. Water levels have plunged due to El Niño, a variant of the El Niño/Southern Oscillation (ENSO) that generates above-average water temperatures across the eastern equatorial Pacific Ocean every two to seven years.
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