It has been recently announced that from next year, there will be no large tankers and gas carriers transiting the Panama Canal. This development is expected to have a significant impact on the shipping industry, as it will require vessels to find alternative routes. While the decision may come as a surprise to some, it is important to note that safety concerns were the primary driver behind this move. The Panama Canal Authority has been working to ensure the safety of all vessels passing through the canal, and this decision represents a critical step towards achieving that goal. While the change may pose some challenges for the shipping industry, it is a necessary measure to ensure the safety of all those involved.
Impact on Ship Transits
The Panama Canal, a vital waterway for global seaborne gas and oil trading, is facing a significant challenge. Due to months of record drought, the canal's water levels have dropped to unprecedented levels, resulting in a reduction in the number of ship transits. As a result, there is a real prospect that no large tankers will be able to transit the canal from the start of next year, and very few VLGCs will be able to do so either.
Measures Taken by Canal Administrators
The canal's administrators have already cut maximum draft limits for ships transiting the larger neopanamax locks by close to 2 meters. In the coming three months, the number of transits will be reduced from 31 to just 18, with slots for the newer, larger neopanamax locks down to eight per day, mostly taken up by container vessels with the occasional gas carrier.
Implications for the Shipping Industry
This situation has significant implications for the shipping industry. According to a recent report by New York-based tanker brokers Poten & Partners, large oil tankers will no longer feature in this trade. They will not be able to schedule in advance like container ships do, and they are unlikely to compete for auction slots. The report also predicts that tramp vessels, including tankers and dry cargo ships, will be pushed away from the canal, leading to more ton-mile demand and changes in segment utilization as longer hauls may stimulate the use of larger vessels.
Impact on VLGC's
As for VLGCs, it is possible that from early next year, none will be able to transit through the new locks, while transits through the old locks will be heavily reduced. This forecast comes from a report by Clarksons Research, which also suggests that significant additional tonne-miles are likely to be seen as ships sail around the Cape of Good Hope or via the Suez Canal.
Shift in Shipping Routes
The restrictions at the Panama Canal have already had a massive impact on dry bulk shipping. The Suez Canal's share of US Gulf to Asia shipments increased to 83% in October, compared to just 23% a year ago. There is growing consensus that more large ships will look for alternative routes rather than waiting around at the canal.
Summary
The situation at the Panama Canal is causing significant disruptions to global seaborne gas and oil trading patterns. The reduction in transits is likely to lead to changes in segment utilization and more ton-mile demand. As the shipping industry adapts to this new reality, it remains to be seen what impact this will have on rates and spot market liquidity.
(This article is sourced from Splash247 and curated by Thetransporteronline24)
