The future size of feeder vessels will determine how much the legacy locks at the Panama Canal will be utilized by ocean carriers, compared to the new section for big ships.
The expanded section of the Panama Canal that opened for
business in late June was built at a tremendous cost to support the trend towards
use of cost-efficient mega-vessels.
Future demand for the 100-year-old original
locks will depend on how carriers establish new neo-Panamax trade routes and
redeploy vessels that have been displaced on trans-oceanic trunk lines into
regional services, a top official for the Panama Canal Authority (ACP) said last
month.
“We got to get to
the right size of the feeder vessels, but we don’t know yet what they will be,”
Oscar Bazan, vice president for planning and business development at ACP, said last
month at the South Carolina International Trade Conference near Charleston, S.C. “Once the
industry has defined what is a feeder and what is a neo-Panamax, then we’ll see
how the network is going to work.”
Container vessels
with about 5,000 TEUs of capacity can fit through the legacy Panama Canal
locks. An increasing number of vessels in the 8,000-to-9,000 TEU range, termed “post-Panamax,”
are now calling at U.S. East Coast ports by transiting the wider section of the
Panama Canal or the Suez Canal. Neo-Panamax vessels are defined as ones in the
10,000-14,000-TEU range and could begin transiting the Panama Canal later
this year, according to industry officials.
If feeder vessels that shuttle freight from load centers to destination ports are bigger than 5,000 TEUs, it will prevent them from using the older locks.
The neo-Panamax
vessels are expected to shuttle between Asia and the U.S. East Coast, but the
Panama Canal expansion opens up all possibilities for shifting trade patterns
between Pacific and Atlantic coasts in North and South America as well.
Bazan said ACP is also conducting a 40-year demand forecast, which is
difficult to do because of changing macro-economic conditions such as the
global economy, population and consumption growth, and the slowdown of exports from
China as that country focuses on domestic manufacturing and the service
economy.
Panama has room for
a fourth set of locks if long-term demand dictates a need, he added.
More than 200 vessels,
including container ships, liquefied petroleum gas (LPG) carriers, vehicle
carriers, oil tankers, dry bulkers and liquefied natural gas (LNG) carriers,
have transited the Panama Canal since the new lane opened last summer,
according to ACP figures. About 70 percent of the transits are by
container vessels.
Initial projections
were that one to two vessels per day would utilize the expanded locks, which
are 70 feet wider and 18 feet deeper than those in the original Canal, but
Bazan said about 2.5 vessels per day are making the transit.
He noted that major
liner carriers have rerouted service to the Panama Canal to take advantage of
the time savings the waterway provides. The 2M Alliance of Maersk and
Mediterranean Shipping, for example, announced in July that it is switching a
couple of services from the Suez Canal to the Panama Canal.
The boom in U.S. oil
and gas production due to fracking technology is also expected to increase
demand for exporting energy products from Gulf Coast ports to Asia, Bazan said.
In recent weeks,
the Panama Canal has handled the largest car carrier ever built, the first Suez
Max tanker and the first Cape-size bulk vessel. Oil tankers are not likely to
use the Panama Canal to make deliveries, but could use it in ballast position
to complete around-the-world rotations to pick up their next load from the Middle
East, Bazan said.
Using the Canal
instead of rounding Cape Horn saves tankers 5,600 miles and more than 15 days
of sailing time.
In April, ACP implemented temporary draft limits for large vessels
because of water shortages that prevented enough water to be used in lock
chambers to float vessels through. The restrictions required vessels to lighten
loads at ports of origin so they ride higher and require less water to raise
them through the locks.
El Niño, a climate
phenomenon resulting in periodic warming of the tropical Pacific Ocean, changed
the rainfall pattern in Panama, triggering a drought in the canal watershed and
causing water levels in Gatun and Alhajuela lakes to fall substantially below
their average.
ACP
initially sets the maximum draft at
39 feet in fresh water. The draft is the distance between the waterline and
the bottom of the keel.
The draft restrictions have gradually been
increased to 44 feet and will soon be increased to 46 feet, Bazan said. The
water reservoirs are being refiled during the rainy season and officials do not expect any long-term
problems handling the largest vessels in the future, he added.