2
Shipper
BULKDISTRIBUTOR
November/December 2016
Bigger PanCanal struggles to fill container targets
L
ess than half a year since the opening of the expanded
Panama Canal, large amounts of available capacity through
its larger lock remains unutilised, according to shipping lines
speaking at the recent TOC Americas Container Supply chain
event in held in Cancun, Mexico.
The Panama Canal Authority (ACP) has created slots for a total of
12 transits a day for container vessels, however according to
Matthias Dietrich, Hamburg Sud’s senior vice president for the
Caribbean and Latin America West Coast region, less than a third of
that is currently being used.
“Bookings for the Neo-Panamax (up to 14,000 TEU) vessels have
been slow to come – last month, there were a few days which saw
four vessel transits, but on most days it has been two or three
transits,” he said.
“There is still a lot of room,” he continued, adding that this would
mean it unlikely that the ACP would be able to increase transit fees
in the short term.
While the larger locks have led to Panama winning back
considerable volumes from Suez – especially in respect of its role as a
key artery on the Asia-US east coast trade – this has failed to
translate into more vessel transits, as the larger dimensions allow
more cargo to carried on fewer ships.
MSC’s west coast South America planning manager Hernan Salazar
told delegates that the prior to the expansion, there were 16 weekly
service strings through the Panama Canal, which has subsequently
been reduced to 13.
MSC itself has reduced the number of its vessels transiting the
waterway from 18 a week to nine, while the average size of vessels
transiting the waterway was previously 4,600 TEU – which was
effectively the Panamax limits – while it has now increased to 6,400
TEU.
“And that will continue to increase – there has been a 13 percent
increase in capacity altogether on services through Panama there is a
lot of room for more,” he said.
It did hit traffic through Suez however, he added. This time last
year the waterway connecting the Indian Ocean and Mediterranean
Sea saw 52 percent of the traffic between Asia and the US east
coast, with Panama controlling the remaining 48 percent; today
Suez has a 43 percent market share and Panama 57 percent.
“After the new locks Panama was able to offer carriers the same
economies of scale and it is a much shorter route,” he said.
Subsequently, Suez has issued rebates to try and lure some lost
business back – as much as 60 percent according to Rodolfo
Sabonge, vice president of research and graduate studies at Panama
Maritime International University.
The primary target of that pricing policy was backhaul traffic
returning to Asia via South Africa under extreme slow steaming, but
Salazar warned the ACP that it would need to develop some
strategy in response.
But the prospect of Panama seeing large chunks of new business
coming through its most important national asset in the short term
was unlikely, warned Dietrich, especially while demand for container
transport remains so muted.
“There’s some reshuffling of service patterns possibly still to take
place, but the main Asia-US east coast, South America west coastEurope and Asia-South America east coast services will likely remain
as they are.
“There is a theoretical opportunity for vessel upsizing on the route
from Asia to northern Brazil, but that is unlikely while the ports of
Northern Brazil are not able to handle to handle ships of that size –
so it won’t happen anytime soon,” he said.
However, over the medium term, traffic could well see a significant
increase if US shippers in the mid and eastern parts of the country
decide to redesign their container supply chains from Asia.
In that context, US Federal Maritime Commission chairman Mario
Cordero told delegates that the expansion represented a
fundamental change in trade patterns.
“It is going to give US shippers more options about where their
cargo enters the US – if port productivity is low on the west coast
shippers have more options open to them than before,” he said.
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