CHARLESTON COUNTY, SC - Recent reports from the transportation sector show that lower water levels in the Panama Canal could be leading to a steep decline in shipping traffic along the Eastern Seaboard. As these conditions cause concerns for ports along the East Coast, the Port of Charleston has shared an update.
"Global trade is a vital part of our day-to-day life," explained Byron Miller, Chief Commercial Officer of the South Carolina Ports Authority. "Now they're actually entering the dry season. They had a drought even prior to the dry season. So it's something to monitor."
According to ABC News 4, local officials said they have yet to feel an impact, despite the Panama Canal limiting the number of ships traveling daily from 36 to 25. Further limiting travel, the canal is expected to reduce that number to 18 a day by February.
The Panama Canal Authority states that 40 percent of all United States container traffic travels through the canal every year, which translates into around $270 billion in cargo.
"Most of our business is container ships, and those container ships travel under reservations," Miller said. "So as long as they make their appointment time, they're okay to go through. Ninety-eight percent of ships traveling in and out of Charleston through the canal are moving on an appointment, and the canal is honoring those appointments."
As the Port of Charleston notes, a recent port-deepening project could insulate the port from any trouble due to the drought. As the source explained, the Suez Canal has seen an increase in traffic and will raise its transit fees by 5–15 percent in 2024.
Despite this increase, more traffic through the Suez Canal is a good thing for the Charleston Port, Miller shares.
"Ocean carriers and our shipper customers will look for alternative gateways, whether that's through the Suez Canal or different routings," Miller added. "If you look at the growth in global trade, it's been in Southeast Asia and the Indian subcontinent, which actually lines up very well for the Port of Charleston, [because] the quickest path to the United States is through the Suez Canal. The Suez Canal has an even greater draft than the Panama Canal. So the ability to bring in larger vessels more heavily loaded through the Suez Canal is a big advantage."
ANUK will continue to monitor any disruptions or hurdles in the transportation sector, so be on the lookout for our next update.
