Despite the overall decline in ship transits through the Panama Canal, a closer examination of the numbers reveals a resurgence in container shipping, grabbing more slots as other vessel types steer clear of the route.

Drewry Shipping Consultants’ most recent Panama Canal report reveals a 25% drop in December 2023 transits to 746, down from the October figure of 1,002, and a yearly decline of 42% from the previous December’s 1,281 transits.

Related: Maersk chooses terrestrial route over Panama Canal for liner service

The Panama Canal Authority (ACP), however, reversed its December decision to throttle back January and February transits to 20 and 18 daily. Instead, they opted to ramp up the number to 24 per day.

Drewry’s Simon Heaney speculates, “As daily transits climb, we may continue to see container ships increasing their share of the diminished Panama traffic, with average daily figures holding steady, or even rising slightly.”

Related: Panama Canal ramps up daily transits to 24 from 16 in January

24 daily transits remain significantly lower than the 2022 daily average of 34-40, hence total traffic is still lagging. However, sector-wise, the most significant drops are in dry bulk and LPG shipping, while container ship transits have risen by 5% to 30.6% in December as against October numbers.

Heaney suggests, “Containerships find it easier to secure slots as other sectors, most notably dry bulk, are leaving the canal, even if carriers would prefer the slots increased.”

Daily transits of container ships averaged 7.7 and 7.6 in the financial years 2022 and 2023 respectively. The ACP’s fiscal year spans October to September.

Container ship daily transits during November and December 2023 were marginally below average at 7.4 per day, down from the October daily average of 8.4.

However, overall containers transported may have still dropped due to ongoing draught restrictions in the locks.

Maximum draughts in Panama’s Neo-panamax locks have been reduced from 50ft to 44ft, while the Panamax locks have removed the 39.5ft cap.

According to Drewry, “for every foot of lost draught, containerships lose roughly 350 teu capacity. For the largest ships navigating through the Neo-panamax locks, this could slash the payload by about 2,000 teu.”

The decrease in maximum draught has impacted the overall capacity of container ships passing through the Panama Canal. This is a concerning trend for shipping companies to Africa, as it not only affects their ability to transport goods but also impacts their profitability.

In response to this issue, the ACP has announced plans to deepen and widen the canal’s navigation channels. These upgrades will allow larger vessels with higher draughts to safely navigate through the canal, ultimately increasing its capacity and attracting more container ship transits.

Furthermore, the ACP has also implemented various measures to mitigate the impact of reduced draughts on container ships. These include adjusting toll prices for affected vessels and offering incentives for shipping lines utilizing the canal’s full capacity.

As global trade continues to grow and demand for international container shipping increases, the Panama Canal remains a crucial route for many shipping companies. With ongoing improvements and efforts to accommodate larger vessels, it is expected that container ship transits through the canal will continue to rise in the coming years. This will not only benefit the ACP but also contribute to overall economic growth and development in the region.

In conclusion, while there has been a decline in overall ship transits through the Panama Canal, container shipping has seen a resurgence and remains a significant sector for the canal’s traffic. With ongoing improvements and support from the ACP, container ship transits are expected to continue rising, providing an essential link for global trade and supporting economic growth in the region. The Panama Canal continues to play a vital role in international shipping, and its significance is only expected to increase in the future. Therefore, it is crucial for all stakeholders to work together towards ensuring the smooth and efficient operation of this vital waterway. So while there may be challenges and fluctuations in traffic, the Panama Canal remains a crucial route for the global shipping industry and will continue to play a vital role in facilitating international trade. So let us continue to monitor the developments and growth of container shipping through the Panama Canal, as it is a reflection of the overall health and strength of the global economy. With ongoing improvements and efforts to accommodate larger vessels, the future looks bright for this iconic waterway and its vital role in connecting the world’s economies.