The expanded Panama Canal has seen a fast deployment of container services despite expecting the uptake to be slow – and it is on course to hit 15 million teu this fiscal year versus 12 million teu last year.
Panama Canal Authority vice president of planning and business development Oscar Bazán told Container Shipping & Trade: “We budgeted an overall 399 million tonnes for the fiscal year 2017; in our revision last month we estimated 397 million tonnes, so it is very close to budget. Fifty-one per cent of this belongs to the container segment.
“The last two years have been very difficult for the [container] industry so when we tried to estimate the number of services to be deployed we expected slow deployment. But we have seen fast deployment since 1 October 2016 ꟷ we expected two new services, now we have four, all recaptured from Suez Canal.”
He explained that these services migrated to the Suez Canal from 2010 because the Panama Canal previously could not accommodate larger vessels, but now it has been expanded the slings have returned.
The jump from 12 million teu capacity transiting the canal last year to an expected 15 million teu this year is down to the larger average vessel size of 8,500 teu, versus 7,000 teu last year. “We expect the size to grow especially in the last quarter this year as the Ocean Alliance will transit 13,000 teu vessels through the Panama Canal,” Mr Bazán said.
Speaking about the strategy of the Panama Canal Authority, he said: “In terms of strategy, our pricing is designed to attract volume. We are going after volume, so are playing the market a little bit.”
Since its expansion, the Panama Canal has expanded the territory it covers, accessing seven new states from the Mississippi. “With economies of scale, we have gained new territory,” Mr Bazán said.