News / Returning to Suez and rates: the shipping contract conundrum

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Shippers negotiating new contracts this year face a major rates dilemma as the maritime industry contemplates a return to using the Suez Canal.  

When carriers revert to transiting the canal, the reduction in voyage tonne-miles will begin to expose the overcapacity in the market, pushing a significant downward trend in freight rates, especially on Asia-Europe trades. 

Shipping analyst Drewry estimates rerouting round the Cape of Good Hope reduced effective capacity by around 9%, “which has helped carriers once again post some ...