Tag Archives: panama canal

How Panama Canal navigated COVID, drought and trade war

This extremely interesting article details what’s happening at the Panama Canal in terms of ocean shipping trade. I learned a lot from it.

For instance, containers are a small part of the trade through the Canals, both the Panamax and NeoPanamax (deepwater, for the larger ships) routes. The largest part is bulk, grains, coal and oil and LNG.

And the majority of the trade in 2020 is Pacific to Atlantic, not Atlantic to Pacific.

Since there’s a lot of export of these commodities, particularly agricultural and oil-based, from the Gulf Coast of the US to Asia, Canal traffic is a good measure of US international trade of these.

Altogether a good read.

Greg Miller, Senior Editor Thursday, October 15, 2020

How Panama Canal navigated COVID, drought and trade war – FreightWaves
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Drought forces Panama Canal draught restrictions and pushes up rates

 has a good interview in The Loadstar with Jon Slangerup of AGL (American Global Logistics, a forwarder), who is the former head of the Port of Long Beach.  the recent drought has forced the Panama Canal to raise rates, and spot rates to the US East Coast have increased 14% or more.  This may put a dent in the so-called East Coast routing of containers from the Far East.

But Mr. Slangerup made another comment very interesting to a long time observer of the debate about whether the improvements to the Panama Canal would actually win traffic from the West Coast ports such as Long Beach, Los Angeles, and Oakland (let alone Seattle).

He noted that one could view the recent increases of Panama canal traffic as simply a recovery to normal after a long time in which the canal was operating in a reduced fashion because of the construction.  (The canal opened the expansion on 26 June 2016.)  He doesn’t think that the improvements have significantly altered proportions of traffic in the long run.

He also pointed out that many if not most freight buyers are concerned primarily about price.  Unless the Panama Canal can couple reduced tariffs with expanded capacity, shippers may not choose those routes in preference to the West Coast passage, which is also improving even for transit to Europe.  There has been a lot of progress in eliminating delays on the West Coast routes as well.  Slangerup noted that dock-to-rail loadings at the West Coast ports has increased from 23% to 30% and is being driven upward toward a goal of 50%. And there have been gains at the Chicago transfer points due to implementations by several railroads of PSR (precision scheduled railroading). For example, see this article by Julie Shneider in Progressive Railroading.

logo2  via Drought forces Panama Canal draught restrictions and pushes up rates – The Loadstar

Panama Canal discounts may not produce expected flood of new business – The Loadstar

Price wars in the canal business!  Egypt cuts rates in Suez; now Panama cuts rates on its canal.

The cuts seem to be only on return voyages. Drewry’s doesn’t think much of them.

Source: Panama Canal discounts may not produce expected flood of new business – The Loadstar