Drought causes major traffic congestion in the Panama Canal, but those navigating around it must pass through the ‘Gate of Tears’

Two of the world’s busiest shipping lanes are experiencing serious disruptions at the same time. A record drought is disrupting trade through the Panama Canal, while container ships heading to the Suez Canal are being bombarded with missiles and drones by Houthi rebels in Yemen.

The Panama and Suez Canal are among the most important arteries of global trade. Of all phones, cars, jeans, and other goods, 5% are shipped through the Panama Canal, and 12% are shipped through the Suez Canal. This makes it the busiest shipping route in the world after the Strait of Calais and the Strait of Malacca.

This is exactly where things are now due to a combination of climate problems and geopolitical factors. The Isthmus of Panama, where the 81-kilometre Panama Canal connects the Pacific Ocean to the Caribbean Sea, is experiencing the worst drought since 1950. As a result, only 24 cargo ships a day are allowed to pass through the Panama Canal lock. Instead of the usual 38.

This is while the dry season in Central America has barely begun. This limit threatens to decrease further in the coming months, reaching eighteen per day. In addition, due to drought, ships may be less loaded than before.

While transiting the Panama Canal normally takes eight to ten hours, ships are now delayed an average of twelve days. Japanese oil company Ineos recently paid €3.7 million, twenty times normal fees, to Panamanian port authorities for the passage of one of its tankers. Some shipping companies are choosing the old route that was popular before the opening of the Panama Canal in 1914, all the way across stormy Cape Horn, the southernmost point of South America.

Gate of tears

Other ships change their route to the Suez Canal. Although this makes the flight between, say, New York and Shanghai, five days longer, it still saves a lot of time due to the long waits in the Panama Canal.

But anyone who wants to pass through the Suez Canal must first brave Bab el-Mandab. The 26-kilometre-wide strait between Yemen and Djibouti, also known as the Gate of Tears, connects the Gulf of Aden to the Red Sea. Lurking there are Houthi rebels, who have targeted Israeli cargo ships in retaliation for Israel’s war against Hamas.

But when it comes to targets, the Houthis are not always so careful. Last month, paramilitary rebels hijacked a cargo ship belonging to the Japanese shipping company NYK, carrying a load of 5,100 cars, by landing on its deck from a helicopter. At first glance, there seemed to be little Israeli about the ship: the 25 hostage crew members were from Mexico, the Philippines, Bulgaria and Ukraine. However, it emerged that Japanese company NYK had chartered the ship from Israeli shipping tycoon Avraham Ungar.

It turned out that two other cargo ships that were attacked by the Houthis with drones and missiles at the beginning of this month, namely “No. 9” and “Sophie 2,” have no relations with Israel at all. There were no deaths or injuries in either attack. The Houthis appear to be relying on outdated information when choosing their targets, a trader at a European shipping company told… Financial Times.

Armament

The bombing prompted maritime security company Ambrey to warn that cargo ships passing through Bab al-Mandab might do well to consider “ballistic protection measures” – weapons. On Marine Traffic, where everyone – including Houthi rebels – can follow shipping movements off the coast of Yemen, some ships now report that they have armed guards on board as a deterrent.

Meanwhile, cargo ships with ties to Israel have to pay much higher insurance premiums if they want to transit the Suez Canal. Or they could sail all the way around Africa via the Cape of Good Hope, as a group of cargo ships have already done in recent weeks, Israeli shipping expert Judah Levin told transportation website FreightWaves.

Although this African detour is safer, it is also more time consuming, according to Levin. “For ships heading from Asia to Israel, the route around Africa is much longer – about 7,000 nautical miles and ten to fourteen days – than the route through the Suez Canal.”