Consultant’s Insight: Potential airfreight gains from Panama, Suez canal disruptions

As drought conditions continue to affect the Panama Canal and more than 120 container ships reroute from the Red Sea and Suez Canal due to attacks from Houthi rebels, ocean container ships’ transit times have become longer and risks of inventory shortages have grown. [caption id="attachment_69752" align="alignright" width="243"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo Next columnist[/caption] “Most goods sourced from Asia, such as apparel, toys and electronics, coming to the East Coast of the U.S. or to Europe will be impacted by this dual disruption,” Srini Rajagopal , vice president of logistics product strategy at technology firm Oracle , told Air Cargo Next . “Exports from the East Coast, including grain, liquified petroleum gas and liquified natural gas, will also be impacted.” Shippers have advised of delays, including: Ikea : “The situation in the Suez Canal will result in delays and may cause availability constraints for certain Ikea products,” a spokesperson told CNBC. Electrolux : The home appliance company has set up a task force with its carriers to look at several measures, including “rerouting, identifying extra time-sensitive deliveries and finding alternative routes, if needed,” according to the BBC. Abercrombie & Fitch : The clothing brand is looking to switch sea freight to air wherever possible to avoid disruptions, according to an email to suppliers reported by Bloomberg News. Multimodal can fill gap Freight forwarders’ notices offer options to the Panama and Suez canal disruptions. “We are developing alternative solutions, including combinations of air, sea, rail and ground transport, to ensure we can offer our customers the agility and resilience needed to continue operating amid disruptions in the global supply chain,” CEVA Logistics wrote in a Dec. 18 notice about the Red Sea situation. Sea-air providers are preparing for a demand rush from shippers concerned with delays caused by vessels avoiding the Suez Canal, with fashion brands most likely to take up the offer, according to freight forwarder Unique Logistics International . Sea-air routes via Dubai are expected to increase, although the airfreight and air charter market has yet to see any increase in demand. Meanwhile, there has been little improvement regarding the Panama Canal. Despite recent rainfall and the Panama Canal Authority planning to increase the daily number of vessels allowed through the canal to 24 from 22 beginning Jan. 16, the situation remains a concern for ships transporting goods from Asia to the East Coast of the United States. “In any situation where congestion is anticipated, customers would be advised to carefully plan their shipments in advance,” Kuehne+Nagel wrote in a Dec. 19 notice about the Panama Canal backlog. “It is also worth considering that the canal could reduce the transit capacity further if the drought worsens.” Regardless of disruption , “organizations that have greater end-to-end visibility into their supply chains are able to be more agile and better navigate scenarios such as these when they arise,” Oracle’s Rajagopal said.

Consultant’s Insight: Potential airfreight gains from Panama, Suez canal disruptions

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