Expanded Panama Canal has exceeded expectations

Date: Monday, February 4, 2019
Source: American Shipper

Containerships remain the top vessel, but the canal has seen an increase in LPG and LNG carriers since the expansion opened in June 2016.

Although only about eight ships passed through the Neopanamax locks daily in 2018, compared to about 25 to 30 through the Panamax locks, the income between the two is split about evenly, Sáenz said. The new locks allow ships of a maximum capacity of 14,863 TEUs, which is nearly triple the size of those that can transit the original Panamax locks.

“The canal expansion has added the capacity that was needed and we’re doing much better than we expected,” said Sáenz, who opened his presentation by announcing he will retire Tuesday. Ilya Espino de Marotta, the authority’s current executive vice president of engineering and program management, will take over his position.

Containerships, which have been the canal’s No. 1 transit vessel since 2001, accounted for 2,697 of the 5,432 Neopanamax vessels that passed through the larger locks at the canal as of Jan. 8. The Panama Canal also saw a boom in both liquefied petroleum gas (LPG) and liquefied natural gas (LNG) carriers during that same time.

LPG carriers were the second most common type of Neopanamax ship to use the enlarged canal, with 1,375 transiting the waterway through Jan. 8. The amount of LPG cargo long tonnage increased from less than 500,000 long tons in June 2016 to a peak of about 1.25 million long ton in August 2018.

The growth in LNG carriers has been a surprise, Sáenz said. The canal was not used by any LNG carriers when the new locks opened. But since then, 585 LNG carriers have transited the canal through Jan. 8, making them the third-most common type of Neopanamax vessel to use the waterway. LNG cargo reached about 2 million long tons in September 2018.

“We accommodate almost one LNG a day,” Sáenz said. “We started with one per week. We’re having one a day and probably by 2020 we’ll be close to two per day.”

In 2018, 48 percent of the United States’ LPG exports and 55 percent of the country’s LNG exports passed through the Panama Canal.

The expansion also has helped the Panama Canal recapture part of the market share of vessels traveling from Northeast Asia to the United States’ East Coast. The share fell to as low as 37 percent in 2014 as ships from Asia using Egypt’s Suez Canal’s share grew and the U.S. intermodal system’s share decreased.

The Panama Canal has since grown to a 42 percent market share.

“We plan to keep on growing, keep on capturing that market of container vessels coming through Asia,” Sáenz said. “The expansion has made a big difference. We were able to capture that market back.”

The canal can handle all but 4 percent of the world’s current containership fleet of 5,287 vessels. The world’s containership fleet will grow to 5,674 by 2022, which will also increase the post-Neopanamax percentage to 11.

“The number of vessels that we cannot accommodate is going to grow, and we’re already thinking about … the years to come,” Sáenz said.

He said complementary activities at the canal — plans for the Corozal Container Terminal with a 5.3 million-TEU capacity, a ro-ro terminal, logistics park, LNG terminal, electric power generation, bunkering, pipelines, vessel repairs and top-off operations — all are being studied and developed to maximize the route’s value in the future.

“This is the future of the Panama Canal,” Sáenz said, “the very close future of the Panama Canal.”

 

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