Ships Going the Long Way Round with Cheap Oil

Container ships that would normally go through the Panama and Suez canals have instead been going the long way round the continents of South America and Africa, according to a report from SeaIntel.

The six-month report from the second half of 2015 showed that 115 vessels connecting Europe and the U.S. East Coast to Asia made the back-haul trip by sailing round the Cape of Good Hope rather than through the Suez canal, despite using it on the forward legs of the trip.

Vessels sailing via the Suez Canal have to pay an average of $465,000 for passage, according to SeaIntel, which calculated that the South Africa route would save an average of $235,000 per voyage. “SeaIntel concludes that both the canals face a significant challenge in the current low bunker price, as it means that for many services, it is cheaper to sail south of Africa on the backhaul than to use the canal routings,” the report added.

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