Shipping round-up: Panama slot breaks records, Gabon coup hits trade and Black Sea Grain Initiative

Wed 6 Sept 2023
Posted by: Phillip Adnett
Trade News

Shipping vessel waiting at port

This instalment of the IOE&IT Daily Update’s shipping round-up covers the latest news from the Panama Canal droughts, the disruption caused by the recent military coup in Gabon and Russian president Vladimir Putin’s comments on the possibility of restoring Black Sea Grain Initiative.

Panama bid broken

The impact of the drought on the Panama Canal continues to hit international trade routes, as shippers are reportedly being charged large sums of money to skip the line of vessels waiting to pass through.

In August, canal authorities limited the number of vessels that could travel via the passage.

Oystein Kalleklev, Avance Gas’s CEO, told an earnings call that one shipper had paid $2.4m for a single slot, slightly less than the all-time record of $2.6m paid last year.

Industry sources told TradeWinds that they expected this record to be broken ‘soon’.

The price for passing through the canal could rise when taking into account additional costs, says Andy Bridges, Institute of Export & International Trade (IOE&IT) customs and trade specialist.

“There may well be additional costs for the shipper to actually change slots and go through. I wouldn’t be surprised if they ended up paying close to $3m,” said Bridges.

“It’s going to cost money and be a financial burden for freight carriers, even for the larger ones. For smaller firms, we’re probably going to see issues with delays, as they might get outbid by the larger companies and lose their slot.”

Although the blockages are reported to be easing slowly, increased extreme weather means restrictions on the Panama Canal and other water passages could become a regular feature of international trade.


Last week’s coup in the central African nation of Gabon is still sending ripples in trade, with key ports closed after the news broke.

Reuters reported that up to 30 commercial vessels were waiting after military officers overthrew the government.

Any major disruption to a government typically hits shipping – and therefore international trade – hard, causing problems for supply chains.

“In a coup, we typically see a lot of blockages to trade,” Bridges says, noting that a large chunk of regions oil and cocoa is shipped either through or across Gabon’s coastlines.

“Ports get closed, airports are heavily restricted and cross-country traffic is going to be at a standstill. A lot of goods are effectively blockaded in and out of port. A lot of transit gets stopped and searched as the military looks to clamp down.”

Although Gabon’s ports have now reportedly re-opened, the longer-term impact of the coup there and in other Central African nations won’t be known for weeks.

Bridges added:

“It’s a waiting game. We’d need to see what if the old government returns and, if not, the direction of the new government. For traders, it can be a bit unclear.”

Black sea

Negotiations are currently ongoing between Russian president Vladmir Putin and Turkish president, Recep Erdoğan, on the possible resurrection of the Black Sea Grain Initiative.

The AP reports that Putin said he will not allow the deal to be resurrected until Western nations meet his demands, although diplomats have insisted they already have, and that the Russian moves are simply a delaying tactic.

Without a deal, and the safe passages that it contained, ships are passing through dangerous waters as both Ukraine and Russia have indicated they will treat commercial traffic as potentially hostile.

“Vessels are entering sort of at their own risk,” says Bridges.

“We’re going to see the price of grain, and other foodstuffs that used to come out of Ukraine, going up.

“It’s not just the agricultural side of things. It’s also going to hit fuel prices.”

Golden week disappoints

The Loadstar has reported a ‘bleak’ outlook for shippers ahead of China’s ‘Golden Week’, a period of public holidays at the beginning of October where Chinese factories typically shut down and demand slows.

As goods need to be moved before China’s ports and factories start to shut down, space on board vessels is usually very expensive, representing a boon for the industry.

Bridges explained: “China's maritime logistics is probably back to about 80% of its capacity pre-pandemic.”

“Perhaps we don’t see the desire or the demand from those markets as much as we used to, possibly because of this global shift in international trade to things like nearshoring or far-shoring.”

Major sources of trade for China, like the EU and US, have been trying to shift trade to ‘friendlier’ shores in recent months, possibly reflecting weaker demand from those markets.