The global supply chain is facing new disruptions

The global supply chain is facing new disruptions – this time drought and war.

A severe drought is causing shipping delays at the Panama Canal, one of the worlds main maritime trade routes. This in turn is creating congestion at the Suez Canal as ship owners look to re-route their vessels. Now notable queue’s are being created to which some ship lines are paying premium prices in order to “queue jump” and transit the canal quicker.

Low water levels in the Panama canal system means fewer ships are able to transit though causing delays on both sides of the waterway, with some ships waiting 20-days to cross and having to unload cargo to meet new weight restrictions.

In addition, three commercial ships came under attack (Pirates) in international waters of the Red Sea, over the past weekend, elevating risk to global shipping.

Some shipping companies are redirecting their ships to the Suez Canal as the Panama crossing is proving unreliable and charging customers a surcharge for the longer transit.

The Panama Canal typically handles 36 ships per day, but this has gradually reduced to 18 ships per day.

Rerouting will mean longer transits and inevitably higher costs.

There has been nothing confirmed at this stage. But it’s a growing concern.

Further to the above and closer to home Australia’s port operations have been disrupted by a cyber-attack (DP World Port Operations), which has delayed both imports into Australia as well vessels transiting through Australia on their way to New Zealand.