Risks and Resilience in Global Trade

3.  Maritime transportation disruptions and international trade

In November of 2023, Houthi rebels began attacking commercial ships in the Red Sea and the Gulf of Aden forcing major shipping and logistic companies to temporarily reroute vessels around the southern tip of Africa in order to avoid the Suez Canal. This recent disruption in shipping lanes compounds continued Russia’s invasion of Ukraine-related risks in the Black Sea, an important trade and transportation route connecting Europe and Asia. In addition, a drought in Panama, which started in early 2023, has forced the Panama Canal authorities to drastically reduce the number and size of ships passing through the canal. Moreover, there have also been several strikes at major ports, disrupting operations in the United States, Canada, and France.1

These recent transportation disruptions further highlight the importance of understanding the relationships between trade and transportation including routes, chokepoints, and shipping costs. The objective of this section is to provide descriptive statistics on the modes of transportation of traded goods, the main routes of maritime trade, and potential chokepoints. This is accompanied by a discussion of recent transportation disruptions and their impact on shipping costs.

3.1. Modes of transportation of merchandise trade

Few countries provide data on how goods are transported when they enter or leave a territory. For the purposes of this analysis, the OECD has compiled data for major economies that report bilateral trade values by modes of transportation2: Australia, Brazil, Canada, Japan, European Union,3 Türkiye, and the United States (See Annex A for a description of sources and methodology). While the database covers only a fraction of total trade (29.5% of world export value and 33.4% of import value in 2023), some important insights can be gleaned from the data at the region and product level.

There are four major ways (modes) of moving goods over long distances: road, rail, air, and maritime.4 Deciding which mode to use depends on several factors related to each mode, such as cost, capacity, speed, and reliability, as well as the type of goods being shipped. Maritime or rail might be preferred for heavy or bulky items such as cars, machinery, or grains, while air transportation is better suited for high-value or time-sensitive items.

Among the main modes of transportation, maritime transport offers the largest carrying capacity in both volume and weight and, when compared to some other modes, is more affordable and practical when shipping on long distances.5 It is therefore by far the most used mode, accounting for almost half of internationally traded goods in 2023 (48.3%, Figure 3.1, Panel C), followed by air (23.3%) and road (18.8%). Rail and other modes of transportation such as post, pipelines, self-propulsion or fixed mechanism, accounted for 2.9% (Rail) and 3.1% (Other) of the value of goods being moved. Despite significant disruptions to different transport modes during the COVID-19 pandemic, in 2023 the structure of trade by mode of transportation was similar to that in 2019.

The shares vary across countries, as the mode of transportation is determined by the geographical location and transportation infrastructure of a country, its trading partners and goods shipped. With at least one third of goods being shipped by water, maritime transport is the main mode for all the covered economies, except Canada (Figure 3.2). In Canada, goods enter the country mostly by road (52% of imports and 40% of exports were being shipped by trucks in 2023), revealing the importance of the country’s land border with the main trading partner, the United States. Canada is also the only covered country where rail transportation accounts for a relatively large share among the different modes recorded when goods cross its borders (9% of imports and 13% of exports). Most countries with a significant land border use different modes of transportation as illustrated by the fact that at least 10% of goods enter or leave a country by sea, air and road. Brazil stands out with a lower value share of road and air transport for exports (respectively 6% and 4%), as its top exported commodities – grains and oilseed, oil, and mining products – are mainly transported by sea to China.

Figure 3.1. Share of merchandise trade by mode of transportation over time

Note: Based on trade values. Imports panel covers total imports for Australia, Brazil, Canada, Japan, European Union (extra-EU 27 trade, excluding trade with the United Kingdom, Türkiye, and United States. Exports panel excludes Australia which only provides mode of transportation for imports.

Source: OECD calculations based on UN Comtrade, Eurostat, E-Stat, US Department of Transportation (North America Transborder Freight Data), US Department of Commerce - US Census Bureau (See Annex A for more information on the compilation of trade data by mode of transportation).

Figure 3.2. Modes of transportation for merchandise trade vary across areas in 2023

Note: Based on trade values. Imports panel covers total imports for Australia, Brazil, Canada, Japan, European Union (extra-EU 27 trade, excluding trade with the United Kingdom), Türkiye, and the United States. Exports panel covers the same areas except Australia. Australia which only provides mode of transportation for imports.

Source: OECD calculations based on UN Comtrade, Eurostat, E-Stat, US Department of Transportation (North America Transborder Freight Data), US Department of Commerce - US Census Bureau

For bulk items such as mining and agriculture products, maritime shipping is the predominant mode of transportation (Figure 3.3). Textile products and chemicals are also mainly imported by water (70% and 58% respectively) as well as motor vehicles, which has specific ships (“ro-ro” or “roll on/roll off”) to transport them. On the other hand, high-value or time-sensitive items like electronics or pharmaceuticals have larger shares of goods shipped via air (respectively 57% and 65%, for imports). If road transport accounts for an important share of imports and exports for most of the goods, it is rarely the most preferred mode. For the selected economies covered in this analysis, exports show more varied modes of transportation as air and road transportations accounts for larger shares for many products compared to imports.6 For products and countries that mostly rely on modes of transportation other than maritime, recent disruptions in maritime trade may be less concerning. There may be more relevant transportation disruptions for these products or countries, such as those experienced during the COVID-19 pandemic when air travel was largely shut down. These alternative transportation disruptions are not the focus of this section.

Figure 3.3. Shares of modes of transportation by industries, 2023

Note: Imports include data for Australia, Brazil, Canada, Japan, European Union (extra-EU 27 trade, excluding trade with the United Kingdom), Türkiye, and United States. Exports covers the same areas except for Australia which only provides mode of transportation for imports. Shares of the main modes of transportation are displayed for top 10 traded products. Other modes of transportation include self-propulsion, post, and fixed mechanism. The product classification is BDTIxE industries converted from HS Nomenclature at the 6-digit level. Utilities include waste, recycled rubber, gas, and electricity. Other products cover optical media (e.g. digital storage devices), printed materials, and works of art. Maritime transport includes sea and inland waterways.

Source: OECD calculations based on UN Comtrade, Eurostat, E-Stat, US Department of Transportation (North America Transborder Freight Data), US Department of Commerce - US Census Bureau

The structure of trade by mode of transport has not changed dramatically in the last four years although some changes can be observed (Figure 3.4). Since the beginning of the COVID-19 pandemic, the shares of maritime and air transport among the covered economies decreased while road transport increased. Despite a rebound in maritime transport in 2021, the share of goods transported by water was slightly below pandemic levels in 2023 (Figure 3.1). The air cargo industry was also highly impacted as international passenger aircraft belly capacity was drastically reduced in the first half of 2020. In 2023, the air cargo capacities reached 2019 levels but the demand for cargo was still 3.6% below pre-pandemic levels (IATA, 2023[13]).7 Road transportation has become more important in all the covered economies with land borders except Canada. In the United States, trade with Canada and Mexico increased by almost a third between 2019 and 2023, boosting road transportation. In the European Union, the share of road transportation increased as a result of a more limited decline compared to other modes in the context of overall declining trade (Eurostat, 2023[14]) and higher value-to-weight ratios for products such as chemicals which are transported relatively intensely across EU borders.

Figure 3.4. Structure change in modes of transportation for trade between 2019 and 2023

Note: The structure change represents the difference in percentage points between 2023 and 2019 transportation value shares. It covers total trade (exports plus imports) for Brazil, Canada, Japan, European Union (extra-EU 27 trade, excluding trade with the United Kingdom), Türkiye, and United States. For Australia, only imports are included.

Source: OECD calculations based on UN Comtrade, Eurostat, E-Stat, US Department of Transportation (North America Transborder Freight Data), US Department of Commerce - US Census Bureau.

3.2. Potential maritime trade chokepoints

With around half of major economies’ trade depending on maritime shipping, the recent disruptions of transport routes and growing geopolitical tensions have heighted interest in understanding maritime transport pathways and potential chokepoints. While there is no commonly accepted definition, chokepoints can be defined as strategically important, naturally narrow, high-traffic shipping pathways on the world’s most important maritime shipping routes that have few alternative routes. This section builds on two data sources to provide more information on shipping routes and chokepoints: UN Trade and Development (UNCTAD) and IMF Portwatch. UNCTAD provides estimates of annual total volume of merchandise shipped by sea (UNCTAD, 2023[15]). The IMF Portwatch platform estimates the daily volume of trade going through 1 388 ports and 24 chokepoints using AIS (Automatic Identification System) data transmitted from vessels and collected by the UN Global Platform (Arslanalp, Koepke and Verschuur, 2021[16]).8 In addition, traffic statistics from the Suez Canal9 and Panama Canal10 authorities are also used for annual volume of trade by product on these routes.

There are five primary shipping routes for global trade connecting the different regions of the world. The Dover Strait, or the English Channel, connects the North Sea and the Atlantic Ocean and is a vital trade link between Europe and the United Kingdom. It is also a primary maritime route between the Atlantic and the port of Rotterdam, Europe’s busiest port. The Strait of Malacca near Indonesia is not only the main shipping lane out of Asia, but also connects Asia’s biggest economies. The Panama Canal is a key pathway between Asia and the East Coast of the United States significantly reducing travel time, between 5 to 17 days (or 15 to 37%), compared to routes around the Cape Horn or through the Suez Canal.11 The Suez Canal is the shortest sea route between Asia and Europe and, on the route from Shanghai to Rotterdam, for example, cuts transit time by some nine days (or 24%) when compared with transport around the Cape of Good Hope or eight days (22%)12 when compared with transport through Panama Canal.13 The Danish Straits linking the North Sea and the Baltic Sea is an important route for trade between Russia and Europe.14

There are a few strategic locations along these major maritime shipping routes where large shares of maritime trade transit through (Figure 3.5). Notably, a large share of international maritime trade goes through several Asian chokepoints, highlighting the global importance of China in global trade. In 2023, 38% of global maritime trade passed through the Malacca Strait, and the Taiwan and Luzon Straits accounting for 25% and 19%, respectively. Another important shipping route is the one that links Asia to Middle East and Europe with 15% of 2023 global maritime trade transiting through the Red Sea and passing through the Bab-el-Mandeb Strait and the Suez Canal. Another potential choke point is the Strait of Hormuz in the Middle East. It is considered the world’s most important oil transit choke point with little options to bypass the strait. Only Saudi Arabia and United Arab Emirates have pipelines that can ship crude oil out of the Persian Gulf. 15 Finally, 19% of global maritime trade passes through the Gibraltar Strait which is another important location on maritime transport routes linking the Americas and Europe.

Figure 3.5. Most of maritime trade goes through a few chokepoints

Note: This map represents the list of chokepoints identified by the IMF for which the share of 2023 total maritime trade is higher than 5% as well as the Panama Canal. Shares were calculated as the ratio of the volume of trade going through each chokepoint to the 2023 total volume of maritime trade. The volume of trade going through each chokepoint is estimated by the IMF using AIS data transmitted from vessels and collected by the UN Global Platform. 2023 total volume of maritime trade was estimated using 2021 total maritime trade from UNCTAD database and yearly growth rates provided in UNCTAD maritime trade reports.

Source: Author’s elaboration based on IMF Portwatch (data extracted on 10 September 2024) and UNCTAD.

The relative importance of these locations appears to have been largely unaffected in the first two years of the COVID-19 pandemic, but 2022 and 2023 feature more significant changes. Overall, the Malacca and Taiwan straits are the two locations that experienced some the largest changes in their relative importance in global maritime transport. Since the beginning of the COVID-19 pandemic, the Malacca Strait has appeared to have attracted relatively traffic while Taiwan Strait has seen a decrease in traffic. The shares of traffic passing through the Gibraltar Strait and Suez Canal have increased while the share of Panama Canal has contracted (Figure 3.6). This can be explained by increased shares of maritime trade going to or coming from Asia (Malacca Strait), going through the Asia – Europe route (Bab-el-Mandeb Strait, Suez Canal) and the America – Europe route (Gibraltar Strait). In addition, the geopolitical tensions between China and Chinese Taipei in 2022 seem to have shifted maritime trade from the Taiwan Strait to the nearby Luzon Strait

Figure 3.6. The increase in traffic after the pandemic went mainly through a few chokepoints, notably the Malacca Strait

Note: Shares are calculated as the ratio of the volume of trade going through each chokepoint on the 2023 total volume of maritime trade. The volume of trade going through each chokepoint is estimated by the IMF using AIS data transmitted from vessels and collected by the UN Global Platform. 2022 and 2023 total maritime trade were estimated using 2021 total maritime trade from UNCTAD database and yearly growth rates provided in UNCTAD maritime trade reports. The “Other” category represents the average of the 18 other chokepoints identified by the IMF.

Source: Author’s elaboration based on IMF Portwatch (data extracted on 10 September 2024) and UNCTAD.

3.3. Recent disruptions in maritime shipping

Disruptions in two major maritime chokepoints have resulted in some re-routing of seaborne trade routes. The Red Sea Crisis has reduced traffic significantly since the start of the Houthis attacks on commercial ships which started at the end of 2023. Major shipping companies have re-routed vessels around the southern tip of Africa to avoid the Suez Canal altogether. Since the start of the attacks, the volume of trade passing through the Suez Canal has been declining while at the same time trade transiting via the Cape of Good Hope has been increasing (Figure 3.7, Panel A). By the end of the first quarter of 2024 about four times more trade was transiting around Africa than passing through the Suez Canal however overall, the total traffic on both these routes remained unaffected. The rapid adaptation of shipping companies to this alternative route avoided large disruptions in Mediterranean ports, in which the daily average volume of trade has not changed significantly compared with other ports worldwide (Figure A B.1 and Figure A B.2). However, extreme weather conditions around the Cape of Good Hope starting in the third quarter of 2024 added further disruptions and transit delays causing wide swings in the average number of daily transits. Analysts believe the recent weather disruptions on this route will unlikely have significant supply chain impact, however carriers will have even more added pressure to adapt and stabilise their network already under pressure from the situation in the Middle East.16

Another worrisome chokepoint has been the Panama Canal which has been suffering from low water levels due to a prolonged drought since early 2023. This forced canal authorities to significantly reduce the number of ships allowed to transit daily as of November 2023.17 Alternative shipping routes by-passing the Panama Canal include sailing around Africa, transiting through the Suez, which is for now a less viable option, or sailing through the Strait of Magellan or Cape Horn. Since the November 2023 announcement, daily trade volumes passing through the Panama Canal have dropped sharply (Figure 3.7, Panel B). The total volume of trade in the last quarter of 2023 and first quarter of 2024 dropped by 25% compared to the same period the year before. While historically relatively less trade passes through the Strait of Magellan than through the Panama Canal, there are some signs of rerouting of trade with 30% more trade volume passing through the Strait of Magellan in the last quarter of 2023 than the year before. However, the daily trade volume passing jointly through both these routes remained significantly lower implying that trading firms might have relied on alternative transportation. One major long-existing option is to unload containers from ships calling at western North American ports — Los Angeles/Long Beach, Seattle, and Vancouver — onto rail cars, a relatively economical, multimodal option. Other future alternatives are discussed in Section 3.3.1 Multimodal alternatives.

Figure 3.7. The Suez Canal disruption is diverting more ships than the Panama Canal drought

Note: Seven-day moving averages, using daily data up to 31 August 2024. The volume of trade going through each chokepoint is estimated by the IMF using AIS data transmitted from vessels and collected by the UN Global Platform

Source: IMF Portwatch (data extracted on 10 September 2024).

As highlighted previously, fossil fuels (coal, coke and petroleum products) and agricultural products are mostly traded through maritime transportation and they also account for most of the non-containerized traffic in the Suez Canal and the Panama Canal (Figure 3.8). This correlation between the industries’ shares of traffic at the chokepoints and their reliance on maritime trade (Section 3.1) emphasises the importance of these strategic locations in maritime trade pathways and implies that trade in energy and agricultural products is potentially more exposed to such chokepoint disruptions.

Figure 3.8. Oil products and cereals represented most of bulk traffic in the Suez Canal and the Panama Canal

Note: The data is available for the Suez Canal only up to 2019. Some product categories provided by the Suez Canal authorities and the Panama Canal authorities have been renamed and regrouped to get a comparable list. Container cargo (accounting for 49.2% and 22.0% of total trade in the Suez Canal and the Panama Canal, respectively) have been excluded because of missing information on the products shipped.

Source: Author’s elaboration based on Suez Canal statistics 2019 annual report (Panel A) and Panama Canal statistics 2023 annual report (Panel B).

3.3.1. Multimodal alternatives

While maritime trade is the main mode of transportation for many products (Section 3.1), in some cases finding alternative modes of transportation is a viable way of responding to transportation disruptions. An alternative to transiting through the Panama Canal is to send cargo on ships to US West Coast ports and then transport the cargo by rail across the United States. Similarly, while the Suez Canal is the main shipping route between China and Europe, air, rail and road freight have long been used as alternative means of transporting goods between the two regions.

In the case of the Suez Canal, the latest Eurostat monthly trade volumes data by mode of transport indicate that there may be signs of traders switching from sea freight to other modes of transportation particularly for imports into the European Union. While monthly import volumes across all modes of transportation were down starting from July of 2023 relative to the same months in 2022 (not shown), the share of maritime trade in 2023 has been increasing relative to previous years (Figure 3.9). However, since the start of the Red Sea Crisis in November 2023, this trend appears to have been reversed as illustrated by the shifts in the shares in December 2023 and January and February 2024. In July 2024, for example, the share of maritime shipping declined almost two percentage points while the share of other modes increased. Rail experienced the strongest increase among the alternative modes.

The recent maritime transport disruptions have also led to new initiatives focusing on upgrading of existing and development of new alternatives. As mentioned in the previous subsection, in the context of the Panama Canal disruptions, the Chilean President recently launched a USD 400 million investment to improve port infrastructure at the Strait of Magellan.18 Governments and private investors have also explored other alternatives such as a canal across Nicaragua, a rail transport system across Colombia, a similar rail system across Mexico, a tunnel across Colombia and a South American land bridge.19 The recently announced India-Middle East-Europe Economic Corridor (IMEC), an ambitious multi-modal transportation corridor initiative that will link Europe and Asia could be an alternative to the Suez Canal.20 If pursued, these projects will take time to come on board.

Figure 3.9. Some small signs of shifts away from maritime transport due to Red Sea Crisis

Percentage point change of volume shares from previous years

Note: Based on volumes (tonnes) of imports from China to the European Union. Shares by mode of transport do not include the “other” category which accounted for 1% or less of monthly trade volumes.

Source: OECD calculations based on Eurostat data. Extracted October 2024.

3.3.2. Impact on shipping costs

As far as the Red Sea situation is concerned, for the moment, about half of the concerned trade (OECD, 2024[3]) has been re-routed to avoid the Suez Canal facing longer transit times, shipping delays and increased costs. ITF (2024[17]) estimates that re-routing around the Cape of Good Hope adds around 8 500 nautical miles to a round trip voyage between the Far East and Europe and adds ten days of transit each way. This source estimates also that since the start of the attacks, the global average of container ship delays has deteriorated from 5.1 days in November 2023 to six days in January 2024 but improved again in February reflecting adjustment of shipping schedules to new routes (Sea-Intelligence, 2024[18]).

Moreover, the lengthening of the sea route adds additional costs to shipping companies. Additional days at sea requires more fuel and more charter costs, which include things like wages, operations costs, insurance, management and administration costs. The longer trip also requires additional days of container hire. In total, ITF (2024[17]) estimates the additional costs of a medium-sized container ship travelling from Asia-Europe transiting around the Horn of Africa to be USD 1.7 million for a round trip which represents an additional USD 272 (or approximately 19%) per 40-ft equivalent unit (FEU – 1 container) container into Europe.21

However, the recent increases in shipping costs appear larger than what is implied by the additional cost estimation. Since the escalation of the situation in the Red Sea, shipping rates for containers have been climbing, particularly for routes between Asia and Europe (Figure 3.10). At the peak just after the initial attacks, shipping rates between Asia and Europe increased over 300% to about USD 5 000 per FEU between Shanghai and Rotterdam and over USD 6 000 between Shanghai and Genoa. At the end of February, one month later, rates subsided falling to just 150% above the rates before the Houthi attacks. Due to interconnectedness between different maritime trade routes, the shipping costs on routes to and from the US East Coast — which are already experiencing an additional upward pressure from the reduced capacity in the Panama Canal — were also impacted by the Suez Canal disruptions. Rates on the Asia — New York route increased by 126% to USD 5 820 per FEU.

In the second quarter of 2024, container rates peaked once again. Bad weather in key chokepoints in East Asia, including fog in Shanghai and torrential rain in Malaysia and Singapore, have resulted in increased port congestion and shipping delays.22 This comes at a time when shipping container demand is on the rise as retailers begin to stock up inventory for the back-to-school and holiday seasons coupled with container availability problems related to the Red Sea crisis. As a result, the composite index more than doubled between April and July 2024 before falling again and ending up around 20% higher than after the initial peak after the Houthi attacks. However, overall, while current container freight rates are relatively elevated, the level is far below what was observed during the COVID-19 pandemic-related supply chain disruptions.

Figure 3.10. Shipping rates for containers have been climbing since the escalation in the Red Sea

Weekly world container index

Note: Composite is weighted average of the eight available routes weighted by trade volume. See Drewry methodology for more information.

Source: Drewry, via Infogram and MacroMicro (accessed 21 October 2024, last data point 17 October 2024).

Only 6% of dry bulk trade passes through the Suez Canal, but bulk ships have been re-routing there due to reduced transit slots through the Panama Canal.23 The Baltic Dry Index (BDI) more than doubled in November after the Panama Canal Authorities reduced the number of daily transits and spiked again shortly after Houthi rebels attacks, reaching levels seen after Russia’s invasion of Ukraine. Grains and Oilseed Freight Index (GOFI) also responded to the Red Sea escalation, but not to the same extent as BDI. As of mid-October, the GOFI is down 4% since just before the Houthi attacks, while the BDI is up by 20% (Figure 3.11).

Figure 3.11. Shipping rates for commodities not immune to transport disruptions

Evolution of the Baltic Dry Index (BDI) and the IGC Grains and Oilseeds Freight Index (GOFI)

Source: Baltic Dry Index sourced from Investing.com (accessed 21 October 2024, last data point 18 October 2024), GOFI index and sub-indices sourced from IGC, OECD calculations.

In 2021, the OECD estimated that the sharp rise in commodity prices, along with higher shipping costs, accounted for much of the observed increase in import price inflation and consumer price inflation in 2021 (OECD, 2021[19]). The impact of rising shipping costs alone on import prices and headline inflation will be much lower, as transport costs are a smaller part of the cost of total imports. While there has been some reaction in shipping rates, for the moment, commodity prices showed only small if any reactions to the escalation in the Red Sea. However, since adjustments are still taking place, a long-term impact of the Red Sea crisis and the Panama Canal drought on prices and on global trade may still not be fully visible.

Overall, while adjustments have been taking place, showing a certain resilience of global trade to maritime transport disruptions, the analysis presented in this Section also shows a range of effects which, depending on their duration and potential intensification or decline, may have more significant implications for global trade, prices and economic growth. OECD (2024[3]) points out, for example, that the impact of an intensification of the evolving conflicts in the Middle East and resultant energy price spikes could be magnified if disruptions extended to the Strait of Hormuz which would significantly disrupt the already very tight supply balance of the global tanker market. This further illustrates why the situations in the Red Sea, the Panama Canal and other major maritime transport chokepoints remain a downside risk to the current trade outlook.

Notes

← 1.  See https://www.ics-shipping.org/news-item/summer-of-strikes-in-us-and-canadian-ports-offer-lessons-for-shipping/ and https://www.hellenicshippingnews.com/hapag-lloyd-the-ports-of-le-havre-and-fos-sur-mer-have-a-72-hour-closure-with-schedule-impacts-on-the-services-calling-these-ports/, accessed 1 May 2024.

← 2.  In this sub-section, the mode of transportation refers to the way goods enter or leave a territory.

← 3.  Eurostat data only records mode of transportation for extra-EU trade.

← 4.  “Self-propelled” is a category found in the trade data. These items include ships, aircrafts, and other vehicles.

← 5.  See https://www.maersk.com/logistics-explained/transportation-and-freight/2024/02/01/logistics-transport-modes-explained;

← 6.  Having said this, Canada relies heavily on road transportation specifically for plastic (78% of trade), furniture (76%) and machinery (72%).

← 7.  However, at the end of 2023 and during the first quarter of 2024, demand for air cargo saw a strong increase, possibly related to the Red Sea crisis (IATA, 2023[13]).

← 8.  IMF Portwatch estimates maritime trade using AIS data transmitted from vessels. These estimates, as well as shares of maritime trade going each chokepoint which use these figures can be differ from national trade and traffic data. However, IMF Portwatch provides extensive global coverage using a consistent methodology thereby ensuring comparable figures across ports and chokepoints.

← 9.  The Suez Canal statistics are available at https://www.suezcanal.gov.eg/English/Downloads/Pages/default.aspx?folder=Navigation%20Reports/Annual%20Reports%E2%80%8B%E2%80%8B%E2%80%8B.

The Panama Canal statistics are available at https://pancanal.com/wp-content/uploads/2023/11/06-Principal-Commodities-Shipped-Through-the-Panama-Canal.pdf.

← 10.  For the Panama Canal statistics, the 2023 annual report is available at https://pancanal.com/wp-content/uploads/2023/11/06-Principal-Commodities-Shipped-Through-the-Panama-Canal.pdf.

← 11.  This direct route between the Atlantic and Pacific Oceans saves around 2 000 to 8 000 nautical miles. The route from Shanghai to New York passing through the Panama Canal cuts the transit time by 17 days (or 37%) compared to transport via the Strait of Magellan or Cape Horn or five days (15%) compared to transport via the Suez Canal. Specifically, travel time is cut from around 46 days via the Strait of Magellan or Cap Horn to around 29 days via the Panama Canal at 15 knots vessel speed.

← 12.  Travel time is cut from around 38 days via the Cape of Good Hope and around 37 days via the Panama Canal, to around 29 days via the Suez Canal.

← 13.  Note that apart from the transit time differences, these routes are also characterised by different weather conditions which can alter transit times under specific circumstances. For example, routes via the Strait of Magellan and Caper Horn, which may seem viable alternatives to some routes passing via Panama Canal, are known for much worse weather conditions.

← 14.  Based on information from https://www.container-xchange.com/blog/shipping-routes/ and https://sea-distances.org (accessed 2 May 2024) and Rodrigue (2024[22]).

← 15.  See https://www.eia.gov/todayinenergy/detail.php?id=39932, accessed 14 June 2024.

← 16.  See https://www.lloydslist.com/LL1149870/Bad-weather-hits-alternative-routing-around-Cape-of-Good-Hope, accessed 11 September 2024.

← 17.  See https://www.reuters.com/business/panama-canal-says-will-slash-booking-slots-due-drought-2023-10-31/, accessed 30 April 2024.

← 18.  See https://www.radiofrance.fr/franceinter/podcasts/les-histoires-du-monde/histoires-du-monde-du-jeudi-25-avril-2024-6545440.

← 19.  See https://www.bakerinstitute.org/research/supply-chain-alternatives-ocean-shipping-if-climate-change-driven-water-shortages-persist.

← 20.  Announced at the G20 summit in September 2023, https://www.internationalaffairs.org.au/australianoutlook/the-india-middle-east-europe-economic-corridor-promises-and-challenges/. Note, however, as of the end of 2023, only Saudi Arabia has committed to invest in this initiative.

← 21.  The 5% increase has been calculated with respect to an average rate of USD 1 460 charged per FEU travelling from Asia to Northern Europe (average for the Drewry Rotterdam-Shanghai index in 2023).

← 22.  See https://www.pegasusmaritime.com/news/market-q2-2024-update-2 accessed 8-July-2024.

← 23.  See https://www.lloydslist.com/LL1147659/Bulkers-diverting-from-Suez-may-need-a-Plan-C.