Datamyne
User:

Pass:

Forgot Password?

Production Maintenance Announcement - Descartes Datamyne Friday, September 20, 2019 – Please be advised that Descartes Systems Group will be performing maintenance starting on Friday, September 20 at 19:00PM GMT and ending at 20:00PM GMT.  This maintenance is to update the Linux Servers. Descartes Datamyne will be briefly unavailable during this time frame. Questions or concerns can be directed to the [email protected] Please reference CHN-9464.

Mac Users: Datamyne requires adjustments
to your browser's security settings.

View instructions HERE

Minimum system reqs for Datamyne 3.0:

IE 11 or higher, and current versions of Chrome, Firefox, and Safari are fully supported. Your browser must have JavaScript enabled. Please clear your cache if upgrading from 2.1. You may need to adjust security settings to enable Excel downloading.

If you are having trouble logging in, please
CLICK HERE

Call 833.262.2315

Datamyne Blog

Covering trade & transport, with tips on using import-export data to advantage

Scaling up for a Bigger Panamax

Category: Transport

Prospects for new services are driving investment at East, Gulf Coast ports

 

by Bill Armbruster, blog anchor

East and Gulf Coast ports are investing billions of dollars in dredging and shoreside infrastructure so they will be able to handle the larger vessels that will be capable of transiting the Panama Canal once the expansion of the waterway is completed in 2015. Otherwise, ports fear they will not be able to compete, both with each other and with West Coast ports.

But will the benefits be as big as the ports anticipate? I’m sharing my views, but I also want to hear your opinions.

The canal expansion will make all-water services via the canal a more attractive option for carriers in the Asia-US trade. At present, the maximum capacity for container vessels transiting the canal is about 5,000 TEUs. After the expansion, it will increase to 12,500 TEUs, but the workhorses of the all-water services will probably be in the 6,000 to 8,000-TEU range. That will certainly improve the economies of scale for carriers because the higher revenue will far surpass the marginal cost increases.

Carriers may, however, find little if any savings due to the highly volatile additional fuel costs of all-water services as well as the costs of Panama tolls. Many shippers would welcome increases in all-water services because it would give more options, but I don’t think the potential cost savings for the carriers will translate into significant rate reductions. Rates are primarily based on supply and demand, not the costs for carriers.

While East and Gulf Coast ports may not gain as much new business from the canal’s expansion as all the hype over the past few years would suggest, the deeper channels and improved shoreside infrastructure will make them more attractive options for carriers offering Suez Canal services.

Some of the ports most likely to benefit from the Panama Canal’s expansion are in Central America, particularly Panama, according to John Martin, a port consultant. “The increased vessel traffic will give them a tremendous opportunity for transshipment as well as logistics operations,” he told me.

Panama’s four main ports handled 6.5 million TEUs in 2011, with transshipments accounting for about 85% of the throughput, according to a Georgia Tech study. Containers shipped from Asia, for example, could be unloaded at Balboa on the Pacific side and placed on vessels serving the west coast of South America. Similarly, they could pick up containers from other origins and head back to Asia, or they could sail through the canal with those additional containers. There are similar opportunities at ports on the Atlantic side of the canal. Cargo can also be shipped across Panama by rail. The Evergreen Group owns a big container terminal in Colon, which also has a big distribution center. Manzanillo and Cristobal, Panama’s other Atlantic ports, also stand to pick up business, as do ports in Colombia and Costa Rica, according to Martin.

Caribbean ports could also be big winners. Mediterranean Shipping Co. has a huge hub at Freeport in the Bahamas, which bills itself as the transshipment hub of the Americas. Kingston, Jamaica, also has great potential, though plans announced last August for CMA CGM to invest $100 million in exchange for a 35-year lease have stalled.

Now that I’ve had my say, I’d like to hear from you.

Bill Armbruster, the anchor for the Datamyne Blog has covered shipping and trade for 30 years as a reporter and editor with The Journal of Commerce and Shipping Digest. “I’ll be blogging on headline news and current issues in oceangoing commerce, trying to shed some light on the backstories and, wherever I can, supply some sound advice for shippers.” Write Bill care of [email protected].

The opinions expressed in this article are those of its author and do not purport to reflect the opinions or views or Descartes Datamyne. In addition, this article is for general information purposes only and it’s not intended to provide legal advice or opinions of any kind and my not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely on this article without first seeking appropriate legal or other professional advice.

Date posted: June 22, 2012

Share

3 Comments

  1. Panama expension is important to Trade. Do we need a bigger Panamax? I do not think so. But we do need more vessels, more sailing schedules to East Coast via the canal.

  2. This is not only a teriffic article, but it was written at a time when the shipping industry is facing the possibility of a longshormen strike on the East and Gulf Coast.

    In 2002 when the West Coast lockout took place creating complete chaos on imports and exports, many shippers began using all-water services to the East coast in place of mini-land bridge. Many of these shippers feared all-water because they anticipated long transit time. However, after using these services they came to find out the all-water service wasn’t so bad after all and saving $1000 per container wasn’t a bad perk either. If the ILA strikes , these shippers may just go back via the West Coast again, which will not bode well for the Panama Canal.

  3. All importers and exporters must evaluate the Panamax options as part overall supply chain strategy as well as risk mgmt. strategy like strikes,etc. as Pat points out. Contingency planning has taken on new importance since the Tsunami and Panamax has to be one of those considerations.

    John Fitzgerald - July 2, 2012, 3:28 pm
Chat
Request
Demo