Clarksons: Expanded Panama Canal Not the Bane of Panamax Boxships
- Business & Finance
The Panama Canal expansion project will have an impact on the Panamax container ship fleet as over 100 of these vessels are expected to be displaced following the opening of the new locks, due in April 2016. However, the fleet is deployed widely across the liner network, so there are a number of factors to consider, according to London-based shipbroker Clarksons.
At the start of September the Panamax fleet (sized 3,000+ TEU with a beam less than 32.3m) numbered 855 ships and 3.6m TEU. Of these, 138 operate on services transiting the Panama Canal and they are expected to face pressure next year when the expanded locks open, Clarksons says.
So only around 18% of the sector in TEU terms appear be ‘at risk’ from the Panama Canal expansion.
What are the options for these vessels, around half of which (72) are charter-owned?
A number of these units are expected to find new homes on the North-South and intra-regional trade routes where much of the fleet is already deployed, Clarksons predicts, as additional deployment options there are expected as volumes grow.
Although redeployment of Panamaxes onto these routes has generally slowed (with many ports unsuitable) at least a little further ‘cascading’ may be possible.
Additionally, a number of the older Panamaxes are likely to be sold for demolition (62 ships in the sector will be aged 20+ years in 2016). Finally, whilst the incentive to upsize Panamaxes is strong, the full effect is unlikely to take place instantly and a number may initially remain on the Asia-North America trade.
Clarksons says that today’s Panamax fleet is actually deployed quite widely; with the number operating on the Transpacific likely to be displaced when the expanded Panama Canal opens being far from a critical mass.
The impact could also be softened by demolition and additional growth opportunities elsewhere.
Though there will undoubtedly be an impact from an initial displacement of Panamaxes, a wide range of factors will determine how much of an impact this might eventually have.