Canal expansion fails to revert red numbers

The Panama Canal expansion has failed to revert the difficult situation that currently faces the country’s shipping sector. This is evident in the red numbers shown by all economic activities which compose it.

The $5,450 million invested so far in the expansion project, the 77 kilometers of the interoceanic waterway, the two set of locks and the Standard & Poor’s good qualification have not been enough to change the slowdown trend in the activities that integrate this important sector of the Panamanian economy.

According to the Republic General Comptroller’s figures, container movement decreased by 11.8% in the period between January and October 2016. In this period, 5.1 million container TEUs were handled, an inferior number in comparison with the 5.8 million container TEUs moved during the same period last year.

In the same period, the cargo movement in the national port system also showed negative results. According to government figures, cargo movement was reduced by 17.3% in the first ten months of 2016. Bulk cargo decreased by 22.8%; containerized cargo by 12.5% and general cargo experienced an increase of 8%.

The Suez Canal is one of the main competitors of the Panama Canal.

The Suez Canal is one of the main competitors of the Panama Canal.

Panama Canal

Container movement decreased by 11.8% in the period between January and October 2016.

Container movement decreased by 11.8% in the period between January and October 2016.

All the Panama Canal indicators are red in the period between January and October 2016.

According to the Republic General Comptroller, in the period between January and October 2016, the Panama Canal revenues generated by tolls decreased by 3.1% and craft transit diminished by 6.8%. The transit of big ships diminished by 7.1% and the smaller ones by 4%.

In the case of merchandise passing through the Panama Canal, the figures show that the load measured in net tons decreased by 2.4% and cargo volume fell by 6.1%.

The Panama Canal expansion, inaugurated on June 26, 2016, is the biggest work undertaken since the inauguration of this waterway. The new locks have the necessary capacity to handle 98% of the world fleet and between 97 to 98% of freight vessel fleet.

The Panama Canal’s main competitors are the United States intermodal system and the Suez Canal.

Everything changes

Recently, Paul Wallace, director of Panama Ports Company S.A., (a branch of Hutchison Ports Holdings conglomerate), told the Panamanian daily “La Estrella de Panamá” that ‘since the inauguration of the third set of locks the way logistics and transshipment is done in Panama has changed.”

Wallace explained that “what we are seeing is that ships that used to turn around with cargo from Asia and left it here to be sent to the Atlantic for the Caribbean are now crossing and reducing the number of transshipments they are doing in Panama.”

The Panama Ports director explained that the use of the loading docks has been “more efficient” with the arrival of the neo-panamax.

The ACP expects to close with positive numbers

The fiscal year 2016 ended up being the third year of greater tonnage and income in the history of the Canal. For this fiscal year (2017), which began on 1 October 2016, the budget envisages an additional increase of 49 million tonnes, which obviously will reflect a substantial increase, not only in tonnage, but also in revenues through contributions made by the Canal to the State.

Oscar Bazán, Vice President of ACP Planification and Commercial Development reported that this year the institution is forecasting to close with 14 million TEUs, two million more than in 2016, boosted by the expanded Canal, because for the same period in 2015, around 12 million TEUs transited through the waterway.

Although the expanded Canal was inaugurated in June 26, it should have been operational since April. However, it is expected that the figures will be positive.

The expanded work allows the transit of ships with greater capacity to transport containers, which could be the cause of a decrease in the transit of ships, because now one craft can transport a quantity and volume equal to the same as three smaller ships.

Leave a Reply

Your email address will not be published. Required fields are marked *