- Due to issues in the Middle East, the Panama Canal is being utilized as an alternative to the Suez route, with trade pivoting away from the Strait of Hormuz.
- Diversion around Africa is increasing costs and time as transit risks affect the Suez Canal and Strait of Hormuz.
Houthi Attacks Limit Suez Canal Traffic; Shipping Routes Divert to Africa
What happened
Container traffic through the Suez Canal has climbed past half of its pre-disruption level since Houthi attacks began. In the first two weeks of October, weekly container transits reached 753,000 TEUs, compared to 1.457 million TEUs in the same period of 2023. Since May, more than 140 container ships, carrying over 2 million TEUs of capacity, have switched away from Cape routing, according to Linerlytica.
From wwd.com
Why it matters
The disruption of the Suez Canal forces shipping alliances to use alternative routes connecting to Africa, which increases transit costs and time. While traffic is increasing, it remains far below the pre-attack levels, with projections suggesting a full return to normal levels may not occur until the first quarter of 2027.
Diversion around Africa is increasing costs and time as transit risks affect the Suez Canal and Strait of Hormuz. Due to issues in the Middle East, the Panama Canal is also being utilized as an alternative to the Suez route.
From wwd.com
Who's involved
- HouthisYemeni Islamist organization conducting attacks that disrupt canal traffic
- Suez Canal AuthorityEgyptian government authority that operates and maintains the Suez Canal
- AfricaContinent through which shipping traffic is being diverted to avoid canal risks
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- MaerskSpeculative
Maersk might face changes in supply chain efficiency as carriers return to the shorter Suez route.
- EuropeSpeculative
Europe could see reduced logistics expenses for importers if shipping delays and costs via the Suez Canal decrease.
- East AfricaSpeculative
East Africa could experience increased regional trade and maritime activity due to higher container traffic through the Red Sea/Suez.
Keep exploring
Part of
Diversion around Africa is increasing costs and time as transit risks affect the Suez Canal and Strait of Hormuz.Also in this story
- Amidst ongoing transit risks in the Strait of Hormuz, experts advise on the African Union's diplomatic response to trade bottlenecks causing shortages across Africa.
- Suez Canal was seized and closed, leading to trade diversion and modernization efforts at rival ports like Felixstowe.
The entities involved
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Houthis
Yemeni Islamist organization
- Houthi forces are advancing along the Red Sea coast, expanding their military influence and leveraging the chokepoint to increase pressure on maritime routes.
- Houthis have initiated a naval blockade on Saudi Arabia, escalating the conflict in the Red Sea and pressuring Iran regarding the Bab al-Mandab gateway.
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Suez Canal Authority
Egyptian government authority that owns, operates and maintains the Suez Canal
Nothing else this week.
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Africa
continent