Pacific Weihai loaded in Houston on Dec. 14 with a cargo of liquefied petroleum gas intended for Ningbo, China, a route that should typically take 30 days. Instead, it faces an additional 15 days at sea, 8,000 kilometres in travel distance and potentially $1.8 million in shipping rates to avoid two key chokepoints that are upending global trade.
Normally, ships carrying LPG from US shale fields to plastics-making refineries in China use the Panama Canal, a journey that would take about 30 days and cover nearly 20,000 kilometres. This year, though, droughts have lowered water levels along the conduit, limiting the number of ships that can traverse it and creating long queues.
Instead Pacific Weihai set out to use the Suez Canal in Egypt, which typically would add 10 days but lower the risk of delays. Those plans were quickly foiled by escalating attacks on commercial ships in the Red Sea by Iran-backed Houthi rebels.
On Dec. 18, the tanker diverted its path from the Suez and is now headed for the Cape of Good Hope around Africa, a route that’s 15 days longer than the Panama Canal, said Ciaran Tyler, an analyst at shipping intelligence firm Kpler.
Such diversions could add more than 15% in shipping costs, according to an S&P Global Market Intelligence report published Dec. 26. Chartering a gas tanker for the US Gulf-to-North Asia route on Dec. 14 was $123,000 a day, according to Baltic Exchange data, or about $1.8 million for 15 days. The vessel is owned by China-based Pacific Gas, based on data by Kpler and shipping data Equasis. The company could not be immediately reached for comment.
