According to CCTV News, the Central American country of Panama has suffered a severe drought amid climate change this year. In addition to agricultural production, shipping is another industry in Panama that has been affected by drought. The Panama Canal is an important shipping artery connecting the Pacific and Atlantic oceans, and the drop in water levels seriously affects the passage of the waterway. In the face of the restrictions issued by the Panama Canal Authority, many shipping companies are faced with the issue of time and capital costs**.
Zhou Minglang, captain of a Chinese shipping company: Especially after November 15, the booking success rate is very low, and even more than 30 consecutive days have been unsuccessful. For example, an international shipping company in the middle of the rankings used to have more than 300 ships passing through the Panama Canal each year, and if the current rules of the Canal Authority were unchanged, nearly 40% of the ships might not be able to pass. Many ships have had to divert to waterways such as the Suez Canal, which will not only lead to longer operating hours, but also increased costs.
Wang Zhen, head of a Chinese shipping company: For example, if a ship that can pass through the Panama Canal will definitely have to go around the Suez Canal, or through the Cape of Good Hope, or through the Bering Strait, then this will increase the corresponding cost. If your transportation costs increase, it will definitely lead to an increase in the final market-facing price.
*: Straight flush 7x24 news.