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Global shipping industry hit by severe drought in Panama
来源：shippingazette 编辑：编辑部 发布：2023/08/17 15:17:57
A SEVERE drought in Panama is leading to unusually long delays and tough restrictions along one of the world's most important trade routes, according to the UK's Financial Times.
High temperatures and one of the driest years on record have led authorities in the Central American country to lower the number of crossings and bar ships with heavy loads from using the Panama Canal.
The restrictions have led big carriers including German group Hapag-Lloyd to announce surcharges for routes that rely on the gateway between the Atlantic and Pacific. While lower demand for goods exports has lessened the impact, vessels with loads still light enough to use it are facing extended waits of more than two weeks.
"The Panama Canal is really the wild card in the container shipping market right now," said Peter Sand, chief analyst at Xeneta. "Shippers should consider their options and manage their risks as Panama congestion is on the rise."
More than 3 per cent of world trade by volume, including liquid gas from the US and soft fruits from South America, passes through the nearly 110-year-old canal, which also provides essential income for Central America's richest country per head of population.
Up to 29 per cent of container trade crossing the Pacific travels through the canal, according to data provider MDS Transmodal.
The restrictions, which have been increasing throughout the year, will now be in place into 2024 barring unexpected weather changes, the canal authority said recently.
The limit on the number of transits came in July, just as carriers were set to increase trade ahead of Black Friday and Christmas in the US.
The Panama Canal is the only big maritime route dependent on freshwater, with more than 50 million gallons needed for each ship to cross.
The canal's locks rely on reservoirs. But the first half of the year was the second driest in almost a century in the canal's watershed, according to the Smithsonian Tropical Research Institute.
The drought led Panama to declare an environmental state of emergency in May.
The lack of water pushed the Panama Canal Authority, or ACP, to toughen restrictions and in May it imposed a depth limit of 44 feet on the largest ships, capping the amount of cargo they can carry. From the end of July it also limited daily crossings to 32, down from an average of 36.
That had contributed to a backlog of 264 ships waiting to cross the canal last Friday, a 16 per cent increase compared with the same day last year, according to shipment tracker MarineTraffic.
Average waiting times for larger tankers carrying liquefied natural gas north through the canal increased from eight days as of July 10 to 18 days as of last Thursday, according to shipping agency Norton Lilly.
The ACP said last that it was limiting pre-booked slots for crossings to ease congestion for ships without reservations, and noted that demand was still high despite the restrictions.
The average cost of sending a 40ft container from China to the US Gulf Coast via the canal at short notice has risen 36 per cent to US$2,400 since the end of June, according to data provider Xeneta.
High temperatures and one of the driest years on record have led authorities in the Central American country to lower the number of crossings and bar ships with heavy loads from using the Panama Canal.
The restrictions have led big carriers including German group Hapag-Lloyd to announce surcharges for routes that rely on the gateway between the Atlantic and Pacific. While lower demand for goods exports has lessened the impact, vessels with loads still light enough to use it are facing extended waits of more than two weeks.
"The Panama Canal is really the wild card in the container shipping market right now," said Peter Sand, chief analyst at Xeneta. "Shippers should consider their options and manage their risks as Panama congestion is on the rise."
More than 3 per cent of world trade by volume, including liquid gas from the US and soft fruits from South America, passes through the nearly 110-year-old canal, which also provides essential income for Central America's richest country per head of population.
Up to 29 per cent of container trade crossing the Pacific travels through the canal, according to data provider MDS Transmodal.
The restrictions, which have been increasing throughout the year, will now be in place into 2024 barring unexpected weather changes, the canal authority said recently.
The limit on the number of transits came in July, just as carriers were set to increase trade ahead of Black Friday and Christmas in the US.
The Panama Canal is the only big maritime route dependent on freshwater, with more than 50 million gallons needed for each ship to cross.
The canal's locks rely on reservoirs. But the first half of the year was the second driest in almost a century in the canal's watershed, according to the Smithsonian Tropical Research Institute.
The drought led Panama to declare an environmental state of emergency in May.
The lack of water pushed the Panama Canal Authority, or ACP, to toughen restrictions and in May it imposed a depth limit of 44 feet on the largest ships, capping the amount of cargo they can carry. From the end of July it also limited daily crossings to 32, down from an average of 36.
That had contributed to a backlog of 264 ships waiting to cross the canal last Friday, a 16 per cent increase compared with the same day last year, according to shipment tracker MarineTraffic.
Average waiting times for larger tankers carrying liquefied natural gas north through the canal increased from eight days as of July 10 to 18 days as of last Thursday, according to shipping agency Norton Lilly.
The ACP said last that it was limiting pre-booked slots for crossings to ease congestion for ships without reservations, and noted that demand was still high despite the restrictions.
The average cost of sending a 40ft container from China to the US Gulf Coast via the canal at short notice has risen 36 per cent to US$2,400 since the end of June, according to data provider Xeneta.