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Shippers should plan for 2024 El Nino disruptions: Vespucci Maritime
来源：shippingazette 编辑：编辑部 发布：2023/09/01 17:05:39
THE El Nino weather phenomenon might lead to even lower water levels along the Panama Canal and supply chain disruption in 2023, writes Vespucci Maritime consultancy CEO Lars Jensen.
Supply chain can be planned for a higher degree of efficiency, he said, adding that they can be used to make more informed decisions in terms of which suppliers to use and where.
As the peak season draws to a close in a month's time, US importers will begin to prepare 2024 budgets. And, quite predictably, this will lead to obvious questions such as: "What will the freight rates be in 2024? Will reliability and transit times improve? Will there be capacity shortages in location X on rail/road/port?¡± Mr Jensen said.
The best-case scenario is that rainfall will be plentiful in Panama and that port workers and terminal operators along the US east and Gulf coasts come to an amicable and swift agreement.
"In that case, there is nothing to be concerned about. And this might indeed be the outcome. But it is an outcome that is by no means guaranteed, which is why contingency planning already needs to be considered," he said.
Accurately predicting rainfall in Panama and the amicability of union negotiations is difficult, at best. So what are the potential outcomes?
The El Nino weather phenomenon might lead to even lower water levels at times in 2024 than in 2023, he said. This will not shut down the canal - we are not looking at a "Suez event¡± at all. But it will have an impact.
One element is the draft restriction, which lowers the effective carrying capacity of the large vessels and prompts some cargo to be railed across Panama.
"Then we have the negotiations with the ILA. The contract expires in September 2024. Technically, the current contract includes a no-strike clause. But realistically, a standoff could lead to a number of other issues, including a work slowdown that effectively has the same effect as a strike.
"This has to be seen as a realistic scenario as well. A potential supply chain disruption along the east coast in September 2024 would hit at the height of the peak season for cargo loaded in July in Asia.
"Shippers concerned by either of those two scenarios would likely begin to contemplate shifting part of their supply chain back from the east coast to the west coast, where possible, well before the 2024 peak season," Mr Jensen said.
Supply chain can be planned for a higher degree of efficiency, he said, adding that they can be used to make more informed decisions in terms of which suppliers to use and where.
As the peak season draws to a close in a month's time, US importers will begin to prepare 2024 budgets. And, quite predictably, this will lead to obvious questions such as: "What will the freight rates be in 2024? Will reliability and transit times improve? Will there be capacity shortages in location X on rail/road/port?¡± Mr Jensen said.
The best-case scenario is that rainfall will be plentiful in Panama and that port workers and terminal operators along the US east and Gulf coasts come to an amicable and swift agreement.
"In that case, there is nothing to be concerned about. And this might indeed be the outcome. But it is an outcome that is by no means guaranteed, which is why contingency planning already needs to be considered," he said.
Accurately predicting rainfall in Panama and the amicability of union negotiations is difficult, at best. So what are the potential outcomes?
The El Nino weather phenomenon might lead to even lower water levels at times in 2024 than in 2023, he said. This will not shut down the canal - we are not looking at a "Suez event¡± at all. But it will have an impact.
One element is the draft restriction, which lowers the effective carrying capacity of the large vessels and prompts some cargo to be railed across Panama.
"Then we have the negotiations with the ILA. The contract expires in September 2024. Technically, the current contract includes a no-strike clause. But realistically, a standoff could lead to a number of other issues, including a work slowdown that effectively has the same effect as a strike.
"This has to be seen as a realistic scenario as well. A potential supply chain disruption along the east coast in September 2024 would hit at the height of the peak season for cargo loaded in July in Asia.
"Shippers concerned by either of those two scenarios would likely begin to contemplate shifting part of their supply chain back from the east coast to the west coast, where possible, well before the 2024 peak season," Mr Jensen said.