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Panama Canal adapts to bulk shipping companies
NewsThe Panama Canal’s operational issues led some bulk shippers to choose alternative routes, with future decisions based on capacity and transit assurances.
On 26 August, the Panama Canal Authority (ACP) hosted a virtual roundtable to celebrate the canal’s 110th anniversary. Dr Ricaurte Vásquez Morales, Panama Canal Administrator, discussed the plans, following a challenging year marked by a severe drought.
Bulk shipping challenges
The drought significantly impacted the Panama Canal’s operations, leading to a temporary shift for many bulk shipping companies. Dr Vásquez clarified that the canal did not force companies to reroute but noted that some opted for alternative routes due to pricing and delivery considerations.
He acknowledged that while some bulk carriers might return, their decision will depend on the canal’s capacity and the assurance of timely transit. The ACP is focusing on adapting its services to better accommodate bulk shipping needs and is planning a new round of talks with market participants to explore dedicated passage options.
Indio River water reservoir project
Dr Vásquez highlighted the Indio River water reservoir project, which aims to ensure a consistent transit capacity of 36 to 40 transits per day.
The project, following a Supreme Court mandate to restore water levels to 1999 standards, involves significant community and environmental considerations. The first phase of construction is set to take 18 to 24 months, with an additional four years needed for full implementation.
Adjustments and revenue outlook
To address water shortages, the canal is optimising operations to handle larger vessels and increased tonnage. Panama’s average tonnage per transit has risen to 43,000 metric tonnes this year, up from 38,000 tonnes in 2023.
Looking ahead, the ACP anticipates that bulk shipping might see improvements as the canal’s water management strategies take effect. Dr Vásquez indicated that the canal is on track to meet its revenue goals for the fiscal year and is preparing for a more stable operational environment in the coming years.