The Expanded Panama Canal, now 15 months old, is exceeding expectations and is impacting trade routes for importers and exporters.
The Panama Canal Authority said in the 2018 fiscal year that began Oct. 1, the canal, which underwent a $5 billion, 15-year renovation and expansion, is projected to accommodate about 13,000 vessels, including 2,335 Neopanamax vessels that will carry a record 429.4 million tons through the locks. Last year, transiting tonnage at the Panama Canal increased about 23 percent.
Late last month, the Panama Canal welcomed its 2,000th Neopanamax vessel through the waterway, demonstrating the route’s continued impact on maritime trade. The COSCO Yantian containership completed the milestone transit through the Expanded Canal traveling northbound from the Pacific to the Atlantic Ocean.
“Over the last 15 months, the Expanded Canal has repeatedly exceeded expectations,” said Jorge L. Quijano, Panama Canal Administrator, adding that the milestone transit “serves as yet another reminder of the industry’s rapid adoption of the route and reinforces our commitment to continually improving the service we offer our customers.”
The COSCO Yantian is deployed on the Pacific East Coast 2 service, which operates between Asia and the Caribbean via the Panama Canal.
The 2,000th transit marks another step forward for the Expanded Canal, which has served a number of vessel segments since its opening in June 2016, including container ships, liquefied petroleum gas carriers and liquefied natural gas carries.
At 54 percent, the container segment accounts for the largest segment, while LPG and LNG vessels represent 29.2 and 8.6 percent, respectively. Bulk carriers, tankers, car carriers and cruise ships have also transited the Expanded Canal.
Hackett Associates founder Ben Hackett, discussing cargo volume in the Global Port Tracker the company produced with the National Retail Federation, said West Coast imports are expected to grow only 0.3% during the first half of 2018 over the same period in 2017, while on the East Coast, which has been gaining market share from the West Coast, volume should grow 1 percent.
A study by the Boston Consulting Group and C.H. Robinson Worldwide Inc., a freight-forwarding company, predicted the Expanded Panama Canal could shift as much as 10% of Asian container imports to the East Coast from the West Coast by 2020.
With faster transit times becoming even more important, the ability of shippers to decrease time on the ocean has become strategic and helps keep costs down by having goods arrive closer to the end consumer.
Five ports handle 70 percent of cargo in the U.S. They are the ports at Los Angeles/Long Beach, New York/New Jersey (NY/NJ), Seattle/Tacoma, Savannah and Oakland. All of these ports and the port of Charleston already can or will be able to receive Post-Panamax ships by 2018. Traffic is expected to double at these ports by 2030.
And cargo freight is at an all-time high right now. Ports covered by Global Port Tracker handled 1.8 million Twenty-Foot Equivalent Units in August. The volume was the highest recorded since NRF began tracking imports in 2000, topping the previous record of 1.78 million TEU set just one month earlier. A TEU is one 20-foot-long cargo container or its equivalent.
[Read more about cargo volume: Cargo Imports Hit Record Highs But Slowdown Seen Coming]
In late August, the Panama Canal welcomed the largest capacity vessel to ever transit the Expanded Locks, the CMA CGM Theodore Roosevelt. The container ship, which began its voyage from Asia, made stops along the U.S. East Coast, including the Port of New York & New Jersey.
“Today’s transit not only represents the growing success and adoption of the Expanded Canal, but also its impact on reshaping world trade,” Quijano said.
The CMA CGM Theodore Roosevelt is deployed on the new Ocean Alliance’s weekly South Atlantic Express service that connects Asia and U.S. East Coast ports via the Panama Canal. The SAX service is composed of 11 vessels ranging in size from 11,000 to 14,000 TEUs, or Twenty-Foot Equivalent Units.
The CMA CGM Theodore Roosevelt began its voyage in Shanghai, and also called on the ports of Norfolk, Virginia; Savannah, Georgia, and Charleston, S.C., all of which have seen strong growth and record-breaking tonnage, following investments made to accommodate the larger vessels now able to transit the Expanded Canal.
For this voyage, the CMA CGM Theodore Roosevelt also docked at the Port of New York & New Jersey, which recently completed a four-year, $1.6 billion project to raise the Bayonne Bridge to 215 feet. The move will allow the nation’s third-largest port for the first time to accept ships larger than 9,500 TEU to reach three of its four main terminals.
In addition to the vessel’s record-breaking capacity, the transit of the CMA CGM Theodore Roosevelt also highlights the Panama Canal’s ability to reduce CO2 emissions compared to alternative routes. By traveling through Panama, the vessel saved 29,561 tons of CO2 in bypassing the Cape of Good Hope.
The ship call came as the Port of New York & New Jersey is experiencing record cargo volume growth. During the first six months of 2017, cargo volume rose 4.4 percent compared to the former six-month record set in 2015. The record volumes have allowed the port to maintain its position as the busiest on the East Coast.
The Port Authority said cargo volume for the first six months was 4.4% higher than the same period in 2015, when the previous record of 3.09 million TEUs was established.
In June alone, the port handled 584,606 TEUs, the best June on record and the second highest monthly volume ever recorded in the Port of New York & New Jersey.