Demand among carriers and shippers for this passage between the Pacific and Atlantic oceans shows no sign of abating.
The Panama Canal continues to prove itself a vital artery for the world’s maritime commerce and the demand among carriers and shippers for this passage between the Pacific and Atlantic oceans shows no sign of abating.
In fact, the 104-year-old waterway has achieved various records since it opened its neo-Panamax locks in June 2016.
In May, the Panama Canal Authority (ACP) increased the total number of daily reservation slots for its new locks from seven to eight to handle higher demand, while in June, it upped the maximum allowable beam for commercial and non-commercial vessels transiting these locks from 49 meters (160 feet) to 51.25 meters (168 feet).
These measures are necessary as larger containerships from the Asia-North Europe trade continue to trickle over to the Asia-North America trade and tonnage through the Panama Canal builds. In May, the canal set a new monthly tonnage record of 38.1 million tons (PC/UMS) through all its locks combined, surpassing the prior record of 36.1 million tons (PC/UMS) set in January 2017.
The average containership size through the Panama Canal has significantly increased since the opening of the neo-Panamax locks, despite remaining relatively stable beforehand.
Just one month prior to the opening of the new locks, in May 2016, containerships deployed on the Asia-North America trade that used the Panama Canal averaged 5,646 TEUs, much smaller than the 7,321-TEU average for May 2017, as illustrated in the accompanying chart, which was constructed using BlueWater Reporting’s Capacity Report. By May 2018, that average vessel size jumped to 7,964 TEUs, showing that increased volumes through the waterway are not letting up.
Currently, the largest vessels to pass through the Panama Canal were the 14,414-TEU CMA CGM Theodore Roosevelt, followed by two other CMA CGM vessels of the same size.
John Vickerman, president and CEO of Vickerman & Associates, said at the Rail Supply Chain Summit in May that some naval architects believe that within the next year, even bigger vessels will sail through the canal.
At the start of the Panama Canal’s fiscal year 2018 (October 2017 to May 2018), containership transits comprised 49 percent of the traffic through the neo-Panamax locks, followed by liquefied petroleum gas vessels at 26 percent and liquefied natural gas (LNG) carriers at 12 percent, according to the ACP. The neo-Panamax locks also handle dry bulk, crude, vehicle carriers, passengers and chemical shipments.
The canal initially began transiting LNG vessels when the neo-Panamax locks opened, and the ACP expects LNG shipments through the waterway to skyrocket. In fiscal year 2018, the canal’s LNG traffic is expected to total 244 transits, up from the 163 transits in fiscal 2017, the ACP said.
The Panama Canal welcomed the inaugural transit of the neo-Panamax LNG Sakura in April, marking the start of a new LNG commercial route between the United States and Asia from the recently inaugurated Dominion Cove Point terminal in Maryland. This was the second U.S. LNG export terminal to come online after Sabine Pass in southwestern Louisiana began operations in 2016.
“As the global demand for LNG continues to grow, the Panama Canal remains committed to offering an efficient and safe transit that will benefit its customers, reducing travel times and unlocking new opportunities for world trade,” the ACP said.
Desormeaux is Associate Editor of American Shipper. She may be reached by email at hdesormeaux@shippers.com.
[NEEDS BlueWater chart provided by Hailey in her initial email filing.]