Monday, June 27, 2016

First Freight Containers Transit Newly Expanded Panama Canal

Initial Official Voyage Witnesses Scenes of Celebration
Shipping News Feature
PANAMA – The long awaited expansion of the Panama Canal has officially opened with the passage of the COSCO Shipping Panama through the waterway having been selected by lottery as we detailed last month, the ship’s name having been changed since then from the Andronikos by owners China COSCO Shipping to celebrate an occasion which has been almost a decade in development.

The giant 300 metre long vessel stands 48 metres at the beam, classing her as New Panamax (or NeoPanamax) which is for vessels measuring up to 366 metres and 55 metres at the beam, this means that, despite the increase in capacity, none of the latest ultra large container ships are able to pass through the new locks with the new carrying limit for box boats set at around 13-14,000 TEU. The canal is however capable of handling the Qatari Q-Max liquefied natural gas carriers, a target market, but most classes of tankers are still too large, including Suezmax, which, as the name suggests, can traverse the Panama passages biggest rival.

The official opening of the $5+ billion expansion was a cause for celebration, and much hope is invested locally in an increase in trade. When the expansion was commissioned the outlook for shipping was initially good, however a slump in trade followed since when we have seen both a rise and subsequent fall. Expected to open in 2014, the redevelopment was subject to cost overruns and industrial disputes, plus a failure to stay on budget and some problems with lock production and installation, all of which did not dampen the enthusiasm of President Juan Carlos Varela, who said at the inauguration:

”This is an achievement that all of us Panamanians should be proud of, today marks a historic moment for Panama, for our hemisphere and the world.”

A host of fireworks greeted the Marshall Island registered vessel as she passed through the Canal with her 9,000 TEU payload, heading toward South Korea, moving between the Atlantic locks at Agua Clara early on the morning of June 26 and exiting on the Pacific side that evening after transiting the Cocoli locks with well-wishers celebrating her passage. Many had arrived very early to stand on the banks and see this the first official passage, which was also displayed on giant screens to a pulsing salsa beat.

Despite the latest slump in shipping those associated with the Canal’s development are maintaining a positive outlook, with Manuel Benitez, deputy canal administrator, pointing out that trade is cyclical and saying the market will rebound again and when in an up cycle again the Canal will generate money. Speaking on behalf of the world’s biggest shipping line, Antonio Dominguez, Maersk Managing Director, East Coast of South America, commented:

"It's important to remember that the canal does not create demand. The canal opens the route. Supply and demand on a world level is what will decide whether the Panama Canal will really bring more volume or not, what is certain is that the current canal has maxed out."

Photo: Crowds celebrate as a tug helps the giant ship negotiate a passage.