New Panama Locks – a Year in Review
Over the past year since the inauguration of the expanded Panama Canal a number of areas of shipping have seen a significant impact, according to Clarksons Research.
Although the gas carrier sector was also influenced, the main focus of the project in Panama was always the container trade and the Asia-US East Coast route in particular.
The impact of the new locks, which opened for transit on June 26, 2016, on the box shipping sector has been largely in line with expectations. The key area of impact was always going to be the Transpacific trade, and the Asia-US East Coast route in particular, the largest volume trade through the canal. Following the opening, the Asia-USEC route saw a swift upsizing of Old Panamax containerships, being replaced by Neo-Panamax units, with operators aiming to benefit from the economies of scale offered by running larger vessels through the canal. Regular deployment of Old Panamaxes on the Asia-USEC route via the canal has fallen from 156 units in June 2016 to 30 today.
The total of Old Panamaxes on the broader Transpacific trade now stands at 76, including some still operated via Suez to the USEC and from Asia to the USWC. However, there are around 35 Old Panamaxes idle, and a total of 101 have been scrapped since the start of 2016.
The initial impact last summer was a speedy upsizing of tonnage to Neo-Panamaxes. This jumped the class of sub-8,000 TEU wide beam ships; just 22 of those serve Asia-USEC today. Instead it focussed on the 8-11,999 TEU ships, and today there are 93 of those deployed on the Asia-USEC. And now even units as large as 12,000+ TEU are getting in on the act, with 9 deployed on the Asia-USEC, taking the total deployment of new wider beam units there to 124.
This is all against a backdrop of robust growth on the Transpacific, with peak leg eastbound trade up by 8% y-o-y in Jan-May 2017. However, there hasn’t been any early sign of ‘cargo switching’ with flows proving ‘sticky’, even if USEC infrastructure constraints are diminishing.
“One year may have passed but it appears more time is needed to assess in full the longer-term impact of the new Panama locks on box shipping,” Clarksons said.