Several container carriers have - increasingly without garnering significant attention - started opting for the longer journey south of Africa instead of using either the Suez or Panama Canal on the so-called back-haul legs on routes between the US East Coast and Asia. Most recently, the two major container alliances Ocean Three and CKYHE have rerouted three services between Asia and North Europe, notes analyst firm SeaIntel in its latest Sunday Spotlight newsletter.
The low oil price makes this journey profitable. By increasing their speed, carriers can - in spite of the longer distance - meet their transit schedules even though fuel consumption is significantly higher compared to the shorter distance through either the Suez or Panama Canal. However, tariffs for transiting either of those two canals are bigger than the additional fuel costs accrued by sailing south of Africa.
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