Global shipping bottlenecks and Canadian agriculture

Nobody likes to take a major detour on their summer road trip or hail a taxi during rush hour. For most Canadians it’s not a pleasant experience especially when timelines are tight. But this is akin to what’s going on in the global shipping sector.

Global shipping capacity has been reduced due to detours around Africa from the ongoing unrest in the Red Sea (Figure 1). Currently, there are too few ships to haul containers and the primary reason is because of the closure of the Red Sea (Suez Canal) shipping lanes. Ships are having to travel 30-40% further to reach their destinations and this requires more ships to achieve the same tonnage hauled. In addition, the rerouting of vessels around Africa (Cape of Good Hope) negatively impacts global shipping times and port scheduling, causing port congestion in Asia as ships missed scheduled arrivals. Low water levels in the Panama Canal as well as bad weather and labour issues at key ports have made the problem worse for global transportation.

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