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Tuesday, June 25 2019 @ 04:05 AM UTC

PANAMA CANAL “WON’T BE ABLE TO COPE”

Canal Expansion A new Drewry report, commissioned by Singapore-based Neptune Orient Line’s container shipping line, APL, shows the Panama Canal, while currently coping with the growth in tonnage/transits, is unlikely to be able to mitigate the continuing pressure on North American West Coast Ports and rail infrastructure over the next 10 years. The report finds that, while The Panama Canal Authority is making improvements that will have the result of improving its capacity over the next several years, a 3% annual growth in vessel numbers would be enough to swallow the increased throughput by as early as 2008. Monday, 14 November 2005

The APL-commissioned research by Drewry Shipping Consultants shows that use of the Panama Canal climbed sharply last year as shippers moved to all-water services in response to congestion at US West Coast ports and deteriorating performance of the trans-continental railroads.

APL Chief Executive Ron Widdows said, “The Panama Canal Authority is working hard to implement the current improvements. In spite of their efforts, which we appreciate, we do see some delays in transit developing during the peak shipping season.

“Unfortunately, given the high demand for more all-water container services from Asia to the U.S. East Coast, the improvements capable of being made in the near term will not suffice over the longer term, and will not be enough to materially take the pressure off the North American West Coast. Shippers who were pinning their hopes on all-water services to the East Coast as a significant relief valve will need to factor this into their supply chain planning,” Mr Widdows said.

APL says that in the longer term, the picture is even more troubling. Noting the political and financial difficulties involved in a major expansion of the canal, the Drewry research concludes; “While seemingly at least 10 years in the future, expansion of the Panama Canal will not of itself solve the potentially persistent capacity constraint.”

The report warns that eventual expansion of the canal may only transfer the choke point to the East Coast, unless action is taken to further develop the port and terminal facilities which do not currently have the capacity to efficiently handle the larger 8-10,000 TEU container ships able to use the canal post-expansion.

See: http://www.mgn.com/news/dailystorydetails.cfm?storyid=5975&type=2
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