The Panama Canal is a navigation channel, located in Panama, at the narrowest point of the Isthmus of Panama, between the Caribbean Sea and the Pacific Ocean. Opened on August 15, 1914, it has had an effect of wide proportions by shortening the distance and times of maritime communication, producing advances for a better country.
In recent years, the Canal has had limitations that have affected its operational capacity and that in the future could cause deterioration in Canal service. These problems are the increase of daily transits to a value very close to the maximum capacity of the Canal and the shortage of water.
The current operational capacity of the Canal is 38 ships per day, with an average of 24 hours of time in Canal waters. This capacity is reduced to 32 or fewer ships per day when, for repair and / or maintenance reasons, one of the roads must be closed. After one of these road closures, the capacity of the Canal can increase up to about 42 ships per day temporarily while it is possible to alleviate the bottleneck caused by the closure of a road.
The Panama Canal is one of the largest infrastructures built by man, and a very important element of boosting maritime trade. Built between 1904 and 1914 by the United States, since 2000 it is managed by the Panamanian government itself. The Americans paid approximately $ 375,000,000, including the $ 10,000,000 paid to Panama and the $ 40,000,000 paid to the French company, thus becoming the most expensive project assumed by the country until that moment. After almost 60 years of operations under US sovereignty, in 1977 the Torrijos-Carter treaties were signed, which proposed the return of Canal sovereignty to Panamanians in 2000. During the 20 years of transition, the Canal was operated by the Panama Canal Commission, an agency of the United States government. On December 31, 1999, sovereignty was finally transferred, and since then the Canal has been operated by the Panamanian authorities through the Panama Canal Authority.
Photo: Panamanians celebrating the transferring of the Panama Canal.
Chronology since 1999:
1997: The Panama Canal Authority is created.
2005: A new vessel fee system based on the TEUs is implemented.
2006: (April): The proposal to expand the Panama Canal through the construction of a third set of locks is presented.
2006: (October): The extension proposal is approved by referendum.
2007: (September): The expansion works begin on Cerro Paraiso.
2009: (July): The main contract of the expansion program for the Consortium Grupo Unidos por el Canal is awarded.
2016: The expansion of the Canal is inaugurated.
Tolls:
On October 7, 2007, the Norwegian Pearl cruise ship, of the Norwegian Cruise Line company, imposed the highest toll mark paid for transiting the channel, paying US $ 313,000. Later the Disney breaks the previous record with a toll of more than 330,000 dollars. The lowest toll record was established in 1928 by Richard Halliburton, who swam the Canal paying a toll of only US $ 0.36. His 10-day journey began on August 14 and ended on the 23rd of the same month. The average toll rate is around US $ 54,000. In order to improve the quality of the service offered to its customers the Panama Canal Authority implemented a reservation service, which offers transit spaces for a maximum of 24 vessels per day wishing to guarantee a transit date and a voyage of 18 hours or less. Reservations are available online up to one year in advance, and the interested party must pay a preferential rate in addition to the normal toll.
Number 25 is available, which is assigned by auction to the highest bidder. The record of the highest rate paid through the reserve system of auctions and auctions of the Panama Canal is US $ 220,300 and occurred on August 24, 2006. The client was the Panamax Erikoussa tanker, which avoided a row of 90 vessels that It was formed due to maintenance works of the Gatún lock, thus avoiding a delay of seven days. The normal reservation fee would have been only US $ 13,400.
With the transfer of the Canal to Panama, it went from being a federal agency of the United States, non-profit, to being an autonomous commercial company of the Republic of Panama, whose main objective is to maximize profitability in a sustainable manner, productivity and efficiency of the transit business. With the growth of containerized cargo trade, the Canal faces pressing challenges of insufficient capacity. The Canal currently operates at around 85% of its maximum capacity in a growing market and within a competitive and changing commercial environment. The change that occurs in the Canal in the middle of the
90, when dry bulk cargo ceases to be its main business and gives way to containerized cargo, it forces it to change its approach to service, as container ships demand greater reliability and higher standards. of service, that dry bulk ships.
With the transition, the Canal changed the administration and the legal management model, at a juncture where the market, technology, routes, modes of transport and logistics, as well as competition, undergo great transformations. The Canal, as the inalienable patrimony of the Republic, departs from the foreign enclave model to integrate fully with the maritime and development strategy of Panama. The support of the United States is left behind, to depend exclusively on the Canal's competitive ability as a business. Consequently, the Canal considers the strategic need to strengthen its competitive position, sustainably, in the future as a mechanism to replace the support that meant being administered by its most important user and at the same time the world's leading power. To be successful in this new geopolitical role, the Canal must consolidate the management model that allows it to enhance the comparative advantage of its geographical position, consolidating the competitiveness and value of the route through Panama.
Simulations of capacity modeled by the ACP conclude that the maximum sustainable capacity of the Canal is from 330 to 340 million tons of CP/SUAB(Universal System of Ship Arcing of the Panama Canal) per year.
Redefinition and perspectives of the Canal's competitiveness
As I have said, in the past bulk products (dry and liquid) were the largest revenue generators of the Panama Canal. Bulk merchandise includes dry merchandise, such as grains (corn, soy, wheat, and others), minerals, fertilizers, coal, and liquid bulks such as chemicals, crude oil, and petroleum products. Since 2002, containerized cargo has replaced bulk cargo as the main revenue generator of the Canal. In addition, containerized cargo has the greatest growth potential. While the bulk cargo segment through the Canal is characterized by being relatively fragmented and having multiple routes, origins and destinations, the segment of container ships is concentrated in a few important routes, among which the route between Northeast Asia and the east coast of the United States. This route includes trade between China, Taiwan, Japan and Korea with the United States. The increase in the containerization of a large variety of goods and the accelerated growth of Northeast Asia, and in particular of China as a region that exports manufactured and semimanufactured products to the United States, has not only transformed the traditional base of routes and customers. del Canal, but has also irreversibly modified the competitive environment of the Canal and the route through Panama.
While the transit of bulk cargo remains stable and continues to be served by a large number of shipping operators, the transit of containerized cargo has tended to consolidate in a relatively small number of operators. In contrast to bulk cargo, containerized cargo ocean transport operates in services with scheduled fixed itineraries (line services). Services with fixed itineraries are very sensitive to the variability in Canal service levels. Consequently, the Canal is obliged to offer expedited transits on the date required by the user and with a high degree of reliability, to maximize the value of the route and maintain its competitiveness. Each container ship service on the route through the Panama Canal, from northeast Asia to the east coast of the United States, is equivalent to a rotation of approximately eight vessels that generate about 104 transits through the Canal each year. Each of these services in a fixed itinerary through the Canal represents around 17 millions in revenues per year. However, this route has a strong competition, mainly due to the intermodal system of the United States and, to a lesser degree, the route from Asia to the east coast of the United States through the Suez Canal. Known as the “All-water route”. All-water route, in contrast to the trans-Pacific intermodal route that has a rail section from the west coast to the east coast of the United States.
Approximately one vessel per week transits in the east-west direction and one vessel returns in the west-east direction.
It includes income from tolls and income from other transit support services, such as tugboats, pilots and locomotives.
The Canal must adopt service and capacity policies, as well as executable commercial strategies that allow it to serve the user countries appropriately and at the same time maintain the competitiveness of the route through Panama. In this sense, the Canal will be in a more advantageous competitive position to capture the economic value provided by the route, insofar as it offers the sufficient capacity and service levels required by each of its markets.
Shipping fleets using the channel
Six of the top 10 shipping companies in the world are the main users of the interoceanic route, which together have a 47.2% market share and 1,766 vessels in their fleets. According to the AXS Alphaliner ranking and published in the Journal of Commerce, Maersk Line, Mediterranean Shipping Co., CMA CGM, Evergreen Line, Hapag Lloyd and Cosco occupy the following positions 1, 2, 3, 4, 5, 6, respectively.
The following positions, according to the ranking, mentioned above are occupied by China Shipping, APL, NYK Line, Hanjijn / Senator. None of these lines are among the top ten Canal customers. The index of the first 10 clients of the interoceanic route is headed by Maersk Line, NYK Line, Evergreen Line, Mitsui O.S.K., Hapag Lloyd, Kawasaki Kisen K Line, CMA CGM, Cosco, Mediterranean Shipping Co.
Routes of the Panama Canal and their cargo
Since the beginning of its operations in August 1914, the Panama Canal has been established as a fundamental channel for international maritime trade. Currently, the Panama Canal Authority ensures that 144 commercial routes pass through this route, which, however, do not represent more than 4% of the world's maritime trade. In fiscal year 2000, about 194 million tons of cargo aboard more than 14,000 ships transited the Canal. Transits of Panamax ships represented 35.4% of the 12,300 transits of high-draft vessels.
In 2004 it is verified that the transit of the ships that pass daily through the canal is growing in size and ther efore, in volume of cargo, that is why the transit of the Post-Panamax ships has proliferated and it is a tendency that It is expected in the coming years.
The main routes that cross the Canal are:
East Coast of the USA-Asia: this is the dominant route, the main products that pass through it are the corn that is exported from the central region of the United States to China and Japan and the containers that move bringing goods from Asia to the United States .
East Cost of the USA-West Coast of South America: Northbound, the main goods are banana and crude from Ecuador. From the north to the south, grains, oil derivatives and containerized cargo move.
West Coast of the USA and Canada-Europe: This route is third in importance. Main goods: Coal
West Coast of South America – Europe: The main flow on this route is in the northeast direction with metallic and mineral products that leave from Ecuador and Chile towards Europe. Also important is refrigerated cargo that includes meats and fruits.
Expectations generated by the expansion
The construction of the third lock of the Panama Canal attracts attention in the countries on both sides of the isthmus because of the impact it will have on world trade.
According to a report from “Prensa Latina”, the Panamax and Post Panamax era, classifications of ships that may or may not cross the road, disappear when the new lock set allows passage of those that exceed 294.1 meters in length , 32.3 of beam and 12 of draft, measures current limits.
The importance that the Panamanian government grants to its Canal is reflected in the budget that was approved for the year 2012, which projected revenue of 2,398.9 million dollars, an increase of 292.6 million in relation to 2011. It is the largest of all times, but includes a departure for the design stage of a fourth bridge over the Canal on the Pacific side.
The Panama Canal has a length of about 80 kilometers between the Atlantic and Pacific oceans, where a modern rail system moves the cargoes of the Post Panamax ships that can not cross it, from the ports of Balboa in the Pacific, and the Cristobal in the Atlantic.
International expectations
This is good news for the main Canal users, because it will be easier for them to cross the commercial waterway. As is known, the first five users are the United States, China, Japan, the Republic of Korea and Chile. According to the data, 88% of the commercial activities carried out through the Panama Canal come from the United States and the Asian region. The goods that have to do with China represent 38%. As the already rapid development of the Chinese economy accelerates, trade between China and the United States will increase further. According to statistics from the Ministry of Commerce of China, in 2005 the commercial volume between China and the United States reached 211 thousand 630 million dollars, which means a growth of 24.8% over the previous year. The Panama Canal is the main waterway for the entry and exit along the east coast of the United States of Chinese import and export goods. The expansion of the Canal will undoubtedly boost the expansion of Sino-US trade.
In addition, in recent years the economic and commercial exchange between China and Latin America has experienced a great leap and bilateral trade volume reached 48,000 million dollars in 2005. The figure is expected to amount to about 60,000 million in 2006. The Canal Panama is the shortest route for the Chinese ocean liners that travel to the Caribbean countries and the South American countries of the eastern coast. Currently, on average, 500 Chinese ocean liners go through the Canal each year, and it is expected that this figure will increase when the extension of the interoceanic highway is completed.
Likewise, Panama is already the third commercial partner of China in Latin America. The bilateral trade volume was 3,170 million dollars in 2005. Most of the Chinese trade with Panama is destined for the Colon Free Trade Zone, the second most important city in the Central American country. Not a few Chinese export goods are destined for re-export to the countries of Central America, the Caribbean and South America. The Colon Free Trade Zone, located on the Atlantic side of the Panama Canal, ranks second in the world and is the largest in the Western Hemisphere. Now China is the largest provider of this free trade zone, which occupies 29.5%.
Conclusion
Since its inauguration in 1914, the Panama Canal has provided the world with a short and economical link route between the Pacific Ocean and the Atlantic Ocean. This route has significantly influenced the patterns of world trade and saves large amounts of money and time to the vessels that pass through it. Due to the great influence that the Canal has on world trade, since its inauguration all efforts have been made to guarantee a safe and efficient operation of the Canal, as well as a maintenance and continuous improvement of infrastructure and waterways to meet with the requirements of the world merchant fleet.