Delays of up to 20 days and freight 30% more expensive due to the traffic jam in the Panama Canal

2023-08-23 02:03:52

Updated Wednesday, August 23, 2023 – 02:03

The drought has forced a reduction in the number of ships that can use the infrastructure

The container ship Ever Max, in the Panama Canal. Panama Canal Authority. Logistics The drought causes a jam in the Panama Canal and there are already 134 ships waiting

The measures taken by the Panama Canal to mitigate the effects of the drought are already having consequences on world trade. Although the situation is relatively normal and the logistics sector still does not consider it serious, transits through the infrastructure have been reduced from 38 to 32 boats per day and the maximum draft of ships has also been limited. In addition, there is a traffic jam that affects more than 100 ships, causes delays of up to 20 days to cross and has increased the cost of freight by 30%.

“Since January of this year, depth restrictions have been applied to large ships that pass through the Panama Canal due to the shallower waters that have caused the drought,” he explains. Francisco Aranda, president of UNO, Business Organization of Logistics and Transport of Spain. It is the latest traffic restriction measures that have caused this traffic jam.

According to sources from the Panama Canal cited by Efe, there are currently “a total of 134 vessels awaiting transit from both Atlantic and Pacific entrances.” The average waiting time for “unreserved transits” is between nine and 11 days, although Aranda estimates delays to cross at 20 days.

The Canal uses a system of locks that raise ships to the level of Gatn Lake -from which the water comes- and thus allows communication between the Atlantic and Pacific oceans. The problem is that filling each of these locks requires 101,000 cubic meters of water and right now this, which is also used to supply the population, is in short supply. Panama has experienced “an extensive dry period” in the last decade, recording two of the five driest years in the last 72 years. The restrictions will be maintained in the coming months unless there are “significant changes in weather conditions” compared to current projections, according to the Channel itself.

Saving measures have been applied since January and already at the beginning of the year it was feared that the dry season would affect the water level of the lake. In June they considered restricting traffic, something that happened in July. The Canal explained in a statement that it will maintain the water saving measures “during the rainy months to recover the level of the lakes and thus guarantee the water resource for human consumption without affecting, as far as possible, transit by the interoceanic voyage”.

Finally, in July, “given the prolongation of the effects of the dry season and fulfilling its responsibility to offer a reliable and sustainable service,” the Canal informed its clients of the reduction in the number of ships that circulate each day. Of the 38 that normally pass, on July 30 it went to 32: 10 vessels can pass through the neopanamax expansion (there are no changes here) and another 22 through panamax. Likewise, the draft, the depth reached by the vessels, was lowered to 44 feet (13.41 meters), to reduce the water consumed in the process.

In fact, on August 1, the container ship passed through the Canal Ever Max, which was making its maiden voyage. The ship is 366 meters long and 51 meters wide, and also has a draft of more than 50 feet, which would already be the maximum allowed by the Canal under normal conditions (ie, with the Gatón at its maximum level). Ace, was forced to leave on land the capacity equivalent to 1,400 containers -lowering their weight also reduces their draft-, which were transported by land and picked up at the Colon Container Terminal. This meant that the Canal stopped collecting more than 40,000 dollars in tolls on this transit.

“This situation is already causing the large logistics chains to analyze a replanning of the routes in case this situation worsens or continues“, details Aranda. “The situation is not yet serious, but there are already delays,” he sums up, and the search for alternatives is done with the memory of the blockade in Suez still very present. In that case, the stoppage was total when the enormous Ever Given – 400 meters in length – was stranded transversely in the African ‘corridor’ No ship was able to cross for almost a week and supply chains around the world were affected to a greater or lesser extent.

Thus, although on this occasion there is still circulation and at a relatively high rate, the drought is noticeable. “The first consequence it has had is an increase that has already occurred, in freight, of around 30%,” explains the manager. “Logistics operators are already working to find solutions to this problem We’ll see if it’s circumstantial or structural”. In any case, the two solutions that appear are “reducing the capacity of the ships” and designing new routes,” says Aranda. “But that means that the traffic takes more days and that must be analyzed according to the delivery dates that occur. in the coming weeks,” he warns.