Maersk container route to bypass Panama Canal

News Story
- 18 Jan 2024 ( #1162 ) - Copenhagen, Denmark
2 min read
Maersk will use rail rather than the Panama Canal on its OC1 service
Maersk will use rail rather than the Panama Canal on its OC1 service

Shipping giant A.P. Moller-Maersk will divert some of its container shipments between Australia and North America to rail because of the ongoing drought affecting the Panama Canal.

In an advisory to customers, Maersk says it will use the Panama Canal Railway rather than the Panama Canal on its OC1 service between Oceania and the Americas.

“Based on current and projected water levels in Gatun Lake, the Panama Canal Authority (ACP) is implementing changes to the booking process to control the passages through the Panama Canal,” the advisory says.

“Following a review of our OC1 service … we have made the decision to utilise the Panama Canal Railway to safeguard our customers’ supply chains.

“This decision follows evaluation of the current schedule impact from the delays at the Australian East Coast ports coupled with the modifications to the booking process of the Panama Canal.”

Maersk’s 45-day OC1 route usually stops at the ports of Sydney and Melbourne in Australia, Port Chalmers and Tauranga in New Zealand, Manzanillo in Mexico, Cristobal in Panama, Cartagena in Columbia and Philadelphia and Charleston in the United States.   

The OC1 north-bound service will now bypass Cartagena, with the port being served “through alternate networks”, Maersk says.

Since the middle of last year, the Panama Canal Authority (ACP) has reduced the number of vessels that can transit the canal because of ongoing drought conditions in the region. 

The Panama Canal is the primary route for 57.5% of the total cargo transported in container ships from Asia to the eastern coast of the US.

The restrictions at the Panama Canal come as the shipping industry faces disruption in the Red Sea as Iran-backed Houthi forces target commercial shipping to protest the Israel-Gaza conflict.

The US, United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain have joined a military operation to protect merchant ships from Houthi attacks. 

News outlet Reuters reports container shipping rates for key global trade routes have soared as a result of the disruption to shipping in the Red Sea.

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