A 22% decrease in cargo ship traffic in the Panama Canal has been reported due to rising competition for transit slots. This canal is one of the main trade routes between the eastern and western coasts of the Americas, as well as some routes between the United States and East Asia or Europe.
Impact on Transportation Demand
According to statistics, 54% of the dry cargo shipments that pass through this canal are related to the United States. Major goods include grains, steel, fertilizers, coal, salt, and pet coke, which are primarily transported by Supramax, Handy, and Panamax vessels. The decrease in ship traffic has led to the selection of new routes such as the Cape of Good Hope or Cape Horn for transportation, which increases average travel distances and affects demand for ton-miles.
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New Restrictions in the Panama Canal
The management of the Panama Canal has implemented a series of restrictions to conserve water resources. Since July, the maximum depth for ships in the Neopanamax locks has gradually been reduced from 15.2 meters to 14.3 meters. Additionally, the number of daily transits has decreased from 36 ships on September 4 to 34, and then to 32 ships on September 15. According to planned schedules, the average daily transit is expected to reach 29.5 ships in October.
These restrictions have had a limited direct impact on the dry cargo sector, as most cargo ships pass through the Panamax locks. However, it is expected that these restrictions will have a greater impact on the dry cargo sector in the future, especially with the approach of the corn and soybean export season from the United States.
About 15% of maritime exports of corn and soybeans from the United States typically pass through the Panama Canal towards East Asia and the western coasts of the Americas. With increasing competition for limited transit slots, it is expected that cargo ships will shift towards alternative routes, and a larger share of exports will be sent from ports located on the Pacific coast. Overall, the decrease in ship traffic in the Panama Canal will lead to increased average travel distances and demand for ton-miles.
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