Red Sea, Panama Canal issues: 3 notes for hospital supply execs

Low water levels in the Panama Canal and cargo ship attacks from an Iran-backed rebel group are disrupting the healthcare supply chain and increasing shipping costs. 

Healthcare Ready, a nonprofit that tracks healthcare access trends during disasters, emergencies and outbreaks, said it is monitoring the threats to the medical supply chain. 

Here are three things to know about the conflicts, according to a Healthcare Ready report: 

1. A severe drought in late 2023 forced shipping authorities in the Panama Canal to minimize trade and operations. The Panama Canal accounts for 40% of domestic container trade, and canal authorities have limited daily vessel passages from 38 to 24 because of the reduced water levels. In February, operations are expected to reduce by 40%. 

Total transits are 36% lower compared to 2022 and 62% lower than 2021. 

2. Houthi rebels, a group that's vying for control of Yemen and will soon be classified as a terrorist group by the U.S., have increased attacks on commercial ships in the Red Sea and Suez Canal. The Houthis claim they are targeting vessels tied to Israel, according to The Wall Street Journal. The drone and missile attacks have prompted shipping conglomerates to temporarily halt or reroute shipments away, leading to delays. 

3. Both situations are leading to price hikes. Detouring from the Red Sea and going around the southern tip of Africa is adding between 10 and 12 extra days and $1 million in extra fuel. Plus, when the Suez Canal was blocked for six days in 2021, each day cost an estimated $9.6 billion. 

Since December, shipping costs have steadily increased and will continue rising. 

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