Big Backups at Panama Canal Spur Action

 In Panama Canal, Panama Canal Expansion,, shippers

Congestion. After the last couple years, shippers are probably hoping to never see that word written in an international shipping article or blog again. Unfortunately, those hopes are doomed to be dashed.

Panama CanalOver the last month, congestion has reared its ugly head again. This time at the Panama Canal.

Backlogs of ships and delays have plagued carriers and shippers trying to transport goods between the Pacific and Atlantic Oceans through the Panama Canal since mid-October.

Last week, Reynolds Hutchins reported in the Journal of Commerce (JOC):

There were eight container ships transiting the canal Tuesday and 23 others awaiting transit — 18 on the Pacific side and 5 on the Atlantic… It’s fewer than recorded last week…

With ships lined up, waiting to get through the Panama Canal, delay times as high as 10 days have been reported while some carriers canceled sailings through the canal altogether.

The Panama Canal Authority blames the backlog of ships on weather and higher than usual traffic for this time of year.

But does anyone really care what the Panama Canal Authority blames the problem on? Shippers and carriers don’t even seem to believe these excuses anyway, pointing to the work being done to repair the very badly leaking locks of the Panama Canal expansion project as the cause of these backups.

You can read all about the problems the Panama Canal Authority is having with the expansion (that is looking less and less likely to be finished on time–again!) in our blog: A Little Mistake Cost the Panama Canal Expansion Big Time

The blame or excuses for the backups at the Panama Canal are not what matter. What matters is the action the Panama Canal Authority is taking to fix the problem.

Well, the big backups did spur action instead of just a list of excuses.

The actions the Panama Canal Authority is taking was reported by Michele Labrut in Seatrade Maritime News:

The Panama Canal Authority (ACP) has announced it is taking measures to reduce the current backlog by expediting traffic and decreasing Canal Waters Time (CWT) as it experiences unseasonably high demand.

The ACP has postponed non-critical maintenance work at the locks and modified its booking system as well as it has canceled draught restrictions and assigned additional crews to operate the tugs, locomotives and locks.

The ACP will temporarily suspend booking slots for regulars available in the third period, for vessels less than 91.5 mtr (300 feet) in length and for Just-In-Time slots for regulars, to expedite traffic. These measures will take effect 12 November 2015.

That suspension on booking slots for vessels less than 300 feet in length has already been returned to normal, according to the JOC. But the rest of the above actions should still be taking place to battle the backlog of ships.

So have things improved in the week or so since these actions have been instituted?

Yes, there has been improvement as Hutchins reported yesterday in the JOC on an easing of the vessel backlog at the Panama Canal:

The number of vessels awaiting transit has been reduced significantly… On Wednesday there were 10 vessels in transit and 16 vessels at anchor: 12 on the Atlantic and four on the Pacific side. That’s down considerably since the prior two weeks when AIS Live data showed at least 20 vessels at anchor on either side of the canal.

Of course, improvement is good; however, it is still a backlog of vessels that Hutchins describes as remaining “above normal levels”. And it is legitimate to wonder if voyages through the Panama Canal getting canceled by carriers aid in the easing of the vessel backlog.

When will the backlog end, you ask? Good question. And an important one for shippers.

The answer is: “I dunno.”

I shrugged when I said that, but you might not have notice through your computer or phone screen.

The Panama Canal Authority has not provided an estimate of when the backlog may come to an end. The JOC seems to have pestered the government agency on this topic to no avail. My expectations wouldn’t be high for getting a comment on when the Panama Canal Authority expected the congestion to end anyway. Nor does its recent track record give high confidence in dates that it might supply anyway. 

My expectation as a shipper would be for delays to continue happening on voyages through the Panama Canal, especially as the Panama Canal Authority is doubtless feeling more and more pressure about repairing and completing the work on the expansion.

If such work and repairs are really among the largest factors behind the delays at the Panama Canal, as many shippers and carriers believe, expect delays to continue through the expansion process that should be complete in… “I dunno.”

(Yes, there was more shrugging that just happened.)

I’m certainly not holding my breath on the canal expansion being done by the current April completion date.

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Source: UC Blog

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