The International Monitory Fund’s PortWatch system designed to explore how global supply chains are exposed to present and future disruptions, is labeling the Suez Canal as a “notable chokepoint” calling attention to how dramatically traffic has declined as the security problems off Yemen escalated. In the second half of December, volume according to the IMF data is down by a quarter since the major container carriers operators began their programs of diversions.
The IMF launched a Beta Version of its analytics tool in November and loaded it with daily historical data dating back to the start of 2019. It is designed to permit research on emerging port issues and how they might impact global trade and the economy.
The operation of the Suez Canal is also a major economic contributor to Egypt and other countries in the region. Ports in Saudi Arabia and Jordan for example are being isolated by the diversions although there have been reports that some carriers were operating ad hoc service roundtrips through the Suez Canal to reach the ports in the northern areas of the Red Sea.
Analysts have been highlighting that as much as a quarter of global trade and a third of all containers transit the Suez Canal. The IMF data tracks the daily transits for cargo ships and tankers as well as the current moving 7-day average and the year-ago average.
The moving 7-day average for the number of vessels transiting the Suez Canal has been consistently declining in the second half of December versus a steady level averaging more than 70 transits a day in the first half of the month. The level progressed through the 60s transits a day and over the past six days starting on December 28 has fallen into the 50s with the most recent 7-day average (January 2) at 56.5 vessels. Transits are down in total number 14 percent since December 15 according to the IMF data, with the January 2, 2024, average down 17 percent versus the year-ago level.
The current average number of transits is at its lowest level in over four years. The canal was last averaging transit numbers in the mid-50s in 2019.
The PortWatch system lists petroleum, chemical, and non-metallic mineral products as among the sectors being most impacted by the current challenges in the Red Sea and how it is impacting traffic at the Suez Canal. This highlights the potential challenges for Europe which gets much of its oil and energy supplies from vessels using the Suez Canal.
The numbers for tanker transits however tracked by the IMF appear to be relatively steady in the second half of December with more than 20 tankers a day. Cargo ships, however, are showing a more significant decline with the daily count down nearly 20 percent between December 15 and January 2 (approximately 50 to 38 on January 2).
Analysts have highlighted that the number of major carriers announcing diversion programs is approaching 20 with well over 200 containerships already have been redirected. Several major oil companies including BP and Equinor also said they were redirecting the shipments away from the Suez Canal.
The route around Africa, however is adding 5,000 or more miles and will require as much as two additional weeks of transit times. This compares with 55 ships the Suez Canal Authority had diverted between mid-November and mid-December while 2,218 vessels made the transit during that same period.
The Suez Canal Authority said in mid-December that it was “watching the ongoing tensions in the Red Sea close and examining their effect on the navigation through the canal.”
