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Early signs promising for Panama canal

[ February 15, 2017   //   ]

Vessel traffic through the enlarged Panama Canal hit its highest since 2012 in January, growing 6% on a year earlier, said global trade intelligence platform Panjiva. But after adjusting for the increased capacity of neopanamax vessels the growth may have been 42%, it added. Some 78% of neopanamax slots were filled and shipments via the Suez Canal have in contrast been falling. South-east US ports have been the biggest winners of the canal’s enlargement, led by Savannah. Northwest ports including Seattle lost the most.

Panjiva research analyst Chris Rogers told FBJ that while it was probably too early for data on how the enlarged canal was affecting traffic to and from the UK specifically, imports into the UK had been increasingly steadily. There was also some evidence that operators were offloading return traffic from the UK to US in south-eastern ports such as Savannah before heading through the canal rather than north-east US ports.

The port of Liverpool has been running an extensive marketing campaign in Panama and the Americas, extolling the benefits of its enlarged Liverpool2 terminal which it believes is ion a prime position to capture traffic heading for Europe through the canal.

However, with major new shipping line alliances due to come into operation in April, the full story in terms of revised shipping routes was probably yet to emerge, he added.

Meanwhile, predictions by analysts that the canal would result in the diversion of around 10% of westbound Asian traffic into the US had been largely borne out, he said. “It may have taken a bit longer than expected because of the need to train ships’ captains on passing through the Panama Canal. Unlike the Suez canal, it is more of a squeeze.”

However, there were signs that the 160 slots for neopanamax ships through the Panama canal were being readily taken up – around 78% according to the latest figures, said Rogers.

One factor that may have boosted Panama’s traffic is the perception that it is geopolitically a safer region than Egypt. Although the latter’s government has kept the Suez Canal operating through the country’s recent turbulent events, politically stable Panama might be perceived as less of a risk than the volatile Middle East. Ships passing through Suez need to pass through Egupt and also close to the coasts of Somalia, Yemen and Sudan, all of which have had piracy problems in the recent past.

There are also some suggestions that ship operators are now scrapping ‘old’ panamax and sub-panamax ships in numbers. Where they are still being built, these are mainly for the needs of specific trades such as intra-Asia rather than long-haul east-west routes, said Rogers.

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