Ship Size, Limited Routes Deepen Panama Drought Crisis
Two years after the MV Ever Given became lodged in the Suez Canal, global trade is once again snagged in a narrow waterway — this time the drought-plagued Panama Canal, where ships are currently waiting 30% longer than average to cross.
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The delay leaves shippers to weigh the cost and benefits of taking a different, longer route between the Americas and Asia or Oceania, such as through the Suez or around Africa's Cape of Good Hope, according to Hurley. But those options aren't surefire solutions either.
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No matter what shippers choose to do, lengthier transits increase fuel costs, wait times, and in some instances, result in late fees, according to Holli B. Packer, an attorney in Blank Rome LLP's mass torts and complex disputes practice.
"Absent longer routes, shipowners are insisting on modifications in their charters to Panama Canal transit clauses making charterers responsible for all delays beyond a set time ..." Packer told Law360. "These additional expenses can ultimately lead to higher prices for consumers."
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"Ship Size, Limited Routes Deepen Panama Drought Crisis," by Jennifer Doherty was published in Law360 on September 14, 2023.