Date: Wednesday, September 13th, 2023
Source: Freight Waves
The Panama Canal Authority (ACP) has suspended bookings for super vessels through Sept. 30 in its latest measure to remove a drought-related backlog waiting to traverse the canal.
The largest backlog is in the super category, vessels that carry 4,000-5,000 twenty-foot equivalent units, because they do not qualify for the authority’s reservation system. Suspending these bookings enables the super vessels without reservations and the longest wait times to travel through the canal on a first-come, first-served basis.
According to the ACP, 116 vessels were waiting to pass through the canal on Tuesday; 66 of those vessels had no appointments. The ACP is encouraging all vessels to use the queueing system to reserve a slot. Without a slot, vessels have to wait for the others that have scheduled transit. The average wait for a vessel at this time is around 5.8 days for general cargo vessels, according to the ACP website.
As a result of water levels not recovering enough to resume normal passage, the daily transit limits and vessel draft restrictions the ACP imposed earlier this year will need to remain in place until this time next year. This can change if extensive rainfall is received, but the dry season begins in late November. The reduction in daily passages is behind the backlog.
Ricaurte Vasquez, administrator of the ACP, said Tuesday that over the next 12 months, the authority will review all options to maintain canal transit fluidity.
“We will manage the water levels and we are looking for long-term solutions to maintain 44 feet of draft,” he said in a news conference. “If we have to consider transit reductions, we will. This would be to continue with a draft of 44 feet. We will not reduce draft. If we do that, it will impact 70% of our shippers.”
Earlier this year, the ACP started with water levels that were at the highest levels in the canal’s history. Drought conditions, however, have eaten into the reservoir levels. Water levels in Gatun Lake, which feeds the canal, are at a four-year low and, what’s worse, Panama is halfway through the traditional rainy season and it’s one of the driest on record. Normally at the end of the rainy season in November, the lake’s water level reaches 88.58 feet. Today, the water levels are at 79.6 feet.
“We monitor this situation by the hour and we monitor rainfall by the hour,” Vasquez said. “This is all in real time on their website. … We expect this drought situation will be an extended one.”
Fifty million gallons of water are used when a single vessel traverses the canal. Water-saving measures instituted by the ACP include the reduction of daily vessel transits from 34-36 a day to 32. Vessels must also be 40% lighter. The reduction in vessel-carrying capacity means more vessels need to be used to move the same amount of product. The additional vessels will only add to the congestion. Heavier items like appliances can take longer because multiple vessels are needed to move the orders.
Additional legislation would need to be passed by the Congress of Panama for the ACP to build new reservoirs for the canal and for fresh drinking water for Panama residents.
Vasquez said canal officials are seeing more container vessels lightening their load by transferring cargo at the rate of 600-800 boxes at one terminal at the Panama Port and transferring those boxes via rail. The boxes are then picked up on the other side of the transit.
The exact number of total TEUs transferred was not available as the port does not share that information with the ACP.
“We will honor all reservations,” Vasquez stressed. “… The Panama Canal is still the route of choice for maritime. We will accommodate our customers.”