The Panama Canal manager can finally change its communication register by announcing a capacity record with the crossing of the MSC Marie and its 17,640 TEUs. For many months, it has spoken only to issue restrictions on passages and drafts, causing constraints, disruptions and congestion. Its problem remains: finding new sources of water.
Quite a symbol. While the Panama Canal manager is gradually lifting the barriers in terms of gauge issued for many months so as not to aggravate its water deficit, it is announcing with great fanfare a capacity record reached on August 30.
Coming from the Mexican port of Manzanillo, the MSC Mariea recently built 17,640 TEU container ship, 366 m long and with a width allowing 51 rows of boxes, has become the first neo-Panamax of this size to transit through the most recent locks (2016) of the Central American isthmus. It dislodges theEver Maxa 17,312 TEU vessel operated by Evergreen, which had won the title during its inaugural passage in August 2023. For its record passage, the toll of more than $1.3 million was not, however, offered to the Italian-Swiss shipowner.
Change semantic code
The canal administration can finally change its tune. For many months, with its water situation aggravated by the intense El Niño weather phenomenon, the waterway manager has spoken out only to issue restrictions on passage. This has caused significant disruption. At the peak of the congestion, up to 100 ships queued up and waited up to 21 days to cross the canal.
Without the cyclical phenomenon, which has since been replaced by El Niña (characterized by an increase in precipitation), the shortcut between Asia and the United States, which allows one to go from the Pacific Ocean to the Caribbean Sea in less than ten hours, would be hit hard by global warming.
In recent years, this has resulted in a greater evaporation of the two artificial lakes that supply water to its lock system, Alajuela (which threatens fishing) and Gatun (maritime traffic). For each passage, approximately 200 million liters of fresh water must be discharged into the ocean, which the canal draws from a hydrographic basin formed by the two lakes.
But without water, there are no ships or foreign currency. In 2023, passage rights and services brought in $3.34 billion in revenue to the Panamanian state, or 20% of its resources.
End of limits
After committing in February to no longer issue passage gauges until at least April-May, when the rainy season begins, the administrator began authorizing more daily passages since June 1, raising the level to 32 ships from the 27 in effect since March 25, a threshold that had already been raised from 24 in January. The “divine” rains in the last quarter of 2023 had made it possible not to restrict passage to just 20 ships.
While 35 ships have been allowed to pass since August 5, Panamanian authorities have announced a new relaxation starting in September, i.e. 36 daily passages.
At the same time, the rainy season gradually brought the reservoirs back to their optimum level – Lake Gatun was at 25.91 m in August and Alajuela at 66.21 m – the maximum authorized draft was raised on August 7 to 49 feet (14.94 m), compared to 45 feet in May (13.7 m). It will have been revised four times. The threshold is now close to its normal operation, at 50 feet.
Due to these constraints, large container ships have had to tranship the boxes across the isthmus by train while LNG carriers have diverted from it. Congestion has also been reduced. According to the canal’s notification system, as of August 31, 41 ships were waiting to transit, including 7 without reservations for an average waiting time of less than a day to the North (compared to 23 days at the end of 2023) and 1.5 days to the South (compared to 16.4 days).
The situation is improving but the number of ships at the locks (recent and old) rose to 8,022 (data stopped in July) for the current fiscal year (October 2023-September 2024) compared to 10,856 for the previous year.
New price list
Thanks to the increase in transit slots, Panama expects to increase its revenues by almost 20% for the 2024/25 fiscal year, betting on $5.6 billion. At the end of August, the administrator presented a new method for allocating slots that will come into effect in October for all market segments except LNG and LPG. It includes an adjustment of rates as of September 1.
« This involves improving service levels, better managing supply and demand and optimising operations. In addition, from 1 January 2025, adjustments to fees, changes in the fare structure and the introduction of new tariffs will be implemented. “, is stated in the note to customers.
The new fee schedule includes fees to discourage last-minute cancellations and to ” provide transit alternatives to vessels that have not been granted a slot while already in the canal waters, with the aim of optimising the capacity of the waterway and minimising waiting times “, defends the administrator.
Alternatives to Panama?
The woes of the Panama Canal, which sees some 14,000 ships pass through it each year, are good news for its neighbors. A transoceanic freight rail line in southern Mexico is among President Andres Manuel Lopez Obrador’s flagship economic development projects, while in Colombia, a land corridor linking the Atlantic and Pacific oceans has been debated for years.
But at this point, the canal’s public enemy number one remains water. The board of directors of the ACP (Panama Canal Authority) presented a proposal to the government in September 2023 that poses two options. The first is to define the canal’s watershed and modify or extend the limits established by a 2006 law. The second request is to eliminate the restrictions imposed on the canal for the construction of a new reservoir.
In a latest update, he now refers to ” the identification of alternative water sources from Panama’s 51 watersheds and lakes as well as projects that can increase storage capacity ».
In the meantime, the administrator has no choice but to be moderate so as not to exhaust his reserves and to optimize his storage.
Adeline Descamps
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