The cost of transporting goods along numerous sea routes has sharply increased over the past month, reaching record levels, writes Financial Times. This increase, caused by war and climate change, could lead to higher prices for goods.
The simultaneous impact of the armed conflict in the Middle East and low water levels due to prolonged drought in Europe and Latin America has driven tariffs on key routes, including through the Panama Canal, the Rhine, the Red Sea, and the Black Sea, to record levels.
Alexander Saverys, CEO of the Belgian shipping company CMB Tech, noted that this is an “unprecedented situation”. According to him, factories will have to halt production or seek suppliers in the “more expensive regions of the world”.
According to the pricing agency Argus, the tariff for transporting oil from the Persian Gulf to Asia reached $15.22 per barrel on August 10. This happened due to the threat of attacks on tankers associated with Saudi Arabia while passing through the Bab el-Mandeb Strait. This figure is the highest since the agency began conducting such assessments in 2005.
In the Black Sea, freight rates for tankers heading to the Mediterranean Sea also reached their highest level at least since 2005 this week.
Record prices for passage through canals
Meanwhile, the cost of slots for passage through the Panama Canal has risen to record values. This is due to falling water levels caused by the strong El Niño phenomenon and high traffic, which is also a side effect of the conflict in the Middle East.
Prices for passage through both lock systems of the Panama Canal, calculated for ships of different sizes, reached record highs of $1.1 million and $2.5 million respectively in early August. These are the highest figures for the entire observation period.
The drought in Europe has also caused a dangerous drop in water levels in the Rhine, a river that is critically important for Germany’s heavy industry. Freight rates for barges heading up the Rhine to Cologne, Duisburg, Frankfurt, and Karlsruhe have reached their highest level since 2012.
John Ollert, Head of Cargo Transportation Pricing in Europe at Argus, noted: “This is, without a doubt, the biggest disruption in the shipping market in the history of observations, overshadowing even the Covid-19 pandemic and sanctions against Russia.”
Latest news on sea routes
On August 16, it was reported that despite the war in Iran and attacks on ships, oil-producing countries in the Middle East continue to export large volumes of crude oil through the Strait of Hormuz. This step helps to curb the rise in prices.
On August 10, it became known that Turkey had resumed the transit of ships through its straits on the way to the Black Sea after unexplained delays of some ships amid increased security risks in this area.
Source: UNIAN
