Vessel-tracking data highlights the extent of issue with hundreds of
ships, mainly bulk cargo or gas carriers, seen waiting near entrances
to the canal on the Pacific and Atlantic oceans
From DailyMail by Kamal Sultan
More than 200 ships are stuck on both sides of the Panama Canal after authorities capped the number of crossings because of a serious drought.
The large vessels, thought to be carrying millions of dollars worth of goods, are locked in a traffic jam with some waiting for weeks to cross.
Vessel-tracking data highlights the extent of the issue with hundreds of ships, mainly bulk cargo or gas carriers, seen waiting near entrances to the canal on the Pacific and Atlantic oceans.
Vessel-tracking data highlights the extent of the issue with hundreds of ships, mainly bulk cargo or gas carriers, seen waiting near entrances to the canal on the Pacific and Atlantic oceans.
The number of daily transits through the canal has been capped at 32 by water authorities in a bid to conserve water.
Panama is set to lose $200million in revenue from the delays and it could cause a spike in US grocery and parcel prices as extra fees are hiked on to shipping costs.
More than 200 ships are stuck on both sides of the Panama Canal after authorities capped the number of crossings because of a serious drought
The entrances on both sides of the Panama Canal are jammed with some ships backed up for more than 20 days.
Some shipowners have resorted to rerouting their journeys to avoid the backlog.
The canal uses three times as much water as New York City on a daily basis and needs rainfall to replace it.
But the rainy season is yet to arrive in Panama and the canal is going through its driest spell in more than a century.
Restrictions for the number of vessels passing through has been extended until September 2.
'The delays are changing by the day. Once you make a decision to go there is no point to return or deviate, so you can get stuck,' Tim Hansen, chief commercial officer at Dorian LPG, which operates large gas carriers, told the Wall Street Journal.
Without enough rain, the ship transits are cut and the lucky ones that cross pay hefty premiums.
This increases transport costs for cargo owners like American oil as well as Asian importers and gas exporters.
Ricaurte Vásquez Morales, the administrator of the Panama Canal, warned the restrictions could have to remain in place until the rest of the year.
He said the drought could see a $200million drop in revenue next year if the low rainfall continues into winter.
Conditions of extreme rain or drought are a lot more regular than in the early years of the canal's operation, according to him.
It presents a huge challange for the Panama Canal Authority which supplies water to around half the country's population of 4.5 million.
'The Canal communicates with its customers so that the information allows them to make the best decisions even if it means that they may choose another route temporarily,' Vásquez Morales said.
'Demand remains high which proves the Panama Canal remains competitive in most segments, even with measures to save water.'
Operators have hired the US Army Corps of Engineers, who originally built the canal, and has set aside $2billion over the next decade to divert four rivers into the waterway and help ships flow through.
The canal already has three rivers that feed into it.
Wide disruption has not been caused for containerships which are the canal's biggest users.
Most are given preferential status because they work on fixed schedules and book crossings up to a year in advance.
The canal uses three times as much water as New York City on a daily basis and needs rainfall to replace it.
But the rainy season is yet to arrive in Panama and the canal is going through its driest spell in more than a century.
Restrictions for the number of vessels passing through has been extended until September 2.
'The delays are changing by the day. Once you make a decision to go there is no point to return or deviate, so you can get stuck,' Tim Hansen, chief commercial officer at Dorian LPG, which operates large gas carriers, told the Wall Street Journal.
Without enough rain, the ship transits are cut and the lucky ones that cross pay hefty premiums.
This increases transport costs for cargo owners like American oil as well as Asian importers and gas exporters.
Ricaurte Vásquez Morales, the administrator of the Panama Canal, warned the restrictions could have to remain in place until the rest of the year.
He said the drought could see a $200million drop in revenue next year if the low rainfall continues into winter.
Conditions of extreme rain or drought are a lot more regular than in the early years of the canal's operation, according to him.
It presents a huge challange for the Panama Canal Authority which supplies water to around half the country's population of 4.5 million.
'The Canal communicates with its customers so that the information allows them to make the best decisions even if it means that they may choose another route temporarily,' Vásquez Morales said.
'Demand remains high which proves the Panama Canal remains competitive in most segments, even with measures to save water.'
Operators have hired the US Army Corps of Engineers, who originally built the canal, and has set aside $2billion over the next decade to divert four rivers into the waterway and help ships flow through.
The canal already has three rivers that feed into it.
Wide disruption has not been caused for containerships which are the canal's biggest users.
Most are given preferential status because they work on fixed schedules and book crossings up to a year in advance.
The large vessels, thought to be carrying millions of dollars worth of goods, are locked in a traffic jam with some waiting for weeks to cross
The entrances on both sides of the Panama Canal are jammed with some ships backed up for more than 20 days
However some are caught up in the chaos and have to pay several times the average tolls.
Lars Oestergaard Nielsen, who is head of customer delivery in the Americas at shipping company A.P. Moller-Maersk, said: 'We had two ships that couldn't book and it was quite expensive.
'We went to an auction and paid $900,000 on top of $400,000 normal toll fee for each ship to cross.'
Ordinarily, ships cross the canal at an average 50 feet of draft but this has now been reduced to 44 feet to cope with the drought conditions.
Large boxships have to cross with fewer containers in order to match the lower water depth. Smaller ships are added to help move the rest of the cargo.
Those that aren't on fixed routes like bulk and gas carriers which are booked to move goods in short notice end up facing the longest delays.
Oslo-based Avance Gas operated 17 vessels and has had to re-route 75 percent of its ships moving American exports of butane and propane.
Ships carrying these products to Asia move through the Suez Canal or around the Cape of Good Hope.
'Waiting time is one thing, but it's also the uncertainty,' its chief executive Øystein Kalleklev said.
The number of daily transits through the canal has been capped at 32 by water authorities in a bid to conserve water
Panama is set to lose $200million in revenue from the delays and it could cause a spike in US grocery and parcel prices as extra fees are hiked on to shipping costs
'It's risky to fix a ship with no firm itinerary because you can lose the contract if the wait is too long.
The Panama Canal is a big mess these days twenty days in a queue is unprecedented at this time of the year.'
Huge ships that move bulky items like coal and iron ore are stuck in the traffic jam. They are usually owned by medium or small operators and get no priority.
The restrictions could add more pressure on consumer goods prices, according to maritime firms and experts, as delays and extra fees add to shipping costs.
It could lead to higher prices and less choices for American consumers.
The Panama Canal is important for moving consumer goods from Asia to the United States, especially ahead of peak selling seasons like Christmas.
It also allows faster transportation of US commodities to Asia and South America's Pacific Coast.
The Panama Canal has a 40 percent-market share of containers moving from Northeast Asia to the US East Coast.
Links :
- Reuters : Focus: Historic drought, hot seas slow Panama Canal shipping / Panama Canal seen losing $200 million next year as ship crossings dip
- WS Journal : The Panama Canal Has Become a Traffic Jam of the Seas
- FT : Drought causes headaches for Panama Canal / Geography class: Severe drought in Panama hits global shipping industry
- ABC News : Traffic jam in Panama canal as drought leaves 200 ships stranded
- Safety4Sea : Marine traffic jam: More than 200 ships waiting to cross the Panama Canal
No comments:
Post a Comment