Global News Carriers resume Panama Canal transits on some services as disruption eases

Shippers are seeing an easing of the disruption caused by low water levels along the Panama Canal as carriers resume transits through waterway on some east-west services or find alternative options to transport cargo, carrier and port executives say.

Shippers in Asia and the Americas told the Journal of Commerce in December they were facing delays of up to a month as carriers skipped calls, transshipped and rolled cargo as ships were delayed through the Panama Canal or diverted around southern Africa. But highlighting how things have improved to some extent, Hapag-Lloyd said THE Alliance restored transits through the canal on some of its trans-Pacific to US East Coast EC2 services from January.

“Yes, the EC2 service is transiting through the Panama Canal again,” a Hapag-Lloyd spokesperson told the Journal of Commerce.

Ocean Network Express (ONE) said Panama Canal transits would be fully restored on east and westbound sailings on the EC2 service from Feb. 11 with the departure of Tayma Express from Norfolk, Va. At least four eastbound EC2 services are due to use the canal in February, schedules showed.

ONE, in a customer advisory last week, said due to the improving situation at the canal, other services are also being considered for a resumption of Panama transits. And the carrier said it was ending its Panama Canal contingency surcharge on US and Canadian exports “due to operation improvements within the canal.”

THE Alliance has also increasingly switched its EC6 service back to using the canal rather than via the Cape of Good Hope, although a final decision is still made “on a case-by-case basis depending on available vessel bookings through the canal,” the Hapag-Lloyd spokesperson added.

ONE vessel schedules show three EC6 eastbound sailings from Mobile have used the Panama Canal since Jan. 28, while a March 3 sailing is also expected to use the waterway.

The EC2 service calls at US East Coast ports including Norfolk, Charleston and Savannah and ports in China and South Korea such as Shanghai, Ningbo and Busan. The EC6 service connects the US Gulf ports of Mobile and Houston with Busan, Kaohsiung and ports in China including Hong Kong, Shenzhen and Shanghai.

The situation on the Europe-Latin America trade is “OK, since for the LatAm-Europe services — South America West Coast Express [SWX] and Mediterranean, Central America and South America West Coast Express [MSW] — we have most of the canal transits pre-booked,” the Hapag-Lloyd spokesperson said.

“It is still a crisis we are facing, but these improvements in services obviously give some ease,” they added. Rail, truck alternatives still in play Figures from the Panama Canal Authority (ACP) show there were 44 vessels with bookings waiting to transit as of Feb. 9 and 12 non-booked vessels. The average wait time for ships without bookings was five days for northbound transits and four days for southbound vessels.

Several carriers have sought alternatives to the canal in the last few weeks to maintain both east-west and regional cargo services.

These include Maersk, which started using the Panama Canal railway in January to move containers on its Oceania-US East Coast 1 (OC1) service to accommodate changes made by the Panama Canal Authority in its vessel transit booking system.

“[The railway] has been in use for other cargo transiting through Panama,” Maersk Latin America spokesperson Monica Martinez told the Journal of Commerce. “This is the only service that we have shifted to the railway, and we continue to have all other regular services transiting through the waterway.”

Maersk is running two loops in the service with calls at terminals on the Atlantic and the Pacific coasts of Panama — Manzanillo and Balboa — and using the rail land bridge to connect the two.

Other carriers, including ONE and CMA CGM, are using truck moves between terminals to move some of the containers that used to transit the canal.

The Manzanillo International Terminal (MIT) lost about 50% of its calls by THE Alliance carriers in December after the consortia switched services to a westbound transit via the Cape of Good Hope rather than wait for passage through the Panama Canal, Larissa Barrios, MIT’s business development manager, told the Journal of Commerce. But additional volumes and port calls since January have offset the drop, she added.

“The increase in inter-terminal moves between the Atlantic and Pacific coasts during January also compensated for the drop of cargo from the THE Alliance,” Barrios said.

“The changes we have seen in the last month demonstrate that the land bridge via railroad or trucks give options to carriers in the short-term,” she added. “Nevertheless, the country needs to address the limitations of the Panama Canal and to create a long-term solution capable of providing a consistent service to carriers.” Carriers boost services Carriers such as ONE and CMA CGM are also strengthening services to mitigate the cargo disruption caused by the Panama Canal low water crisis.

ONE said it launched a temporary biweekly Caribbean Express 7 (CX7) service linking Cartegena, Savannah and Charleston “to ensure cargo shipping” between Latin America and the US East Coast to offset disruption caused by the canal delays.

ONE also expanded its Florida-Latin Express service, which links the West Coast of South America via the Panama Canal, to include the US East Coast ports of New York, Philadelphia and Norfolk from the end of January.

CMA CGM, meanwhile, said it would add a ninth vessel to its Medcaribe service linking the Mediterranean and the northwest coast of South America from early March to “provide a greater buffer to overcome operational contingencies, including port congestion.”

Forwarders in Brazil said cargo shipments between the East Coast of South America and the East Coast of North America have been smoother in the last two months.

“Recent shipments I had didn’t have any cargo delays in the region of the Panama Canal — there was no transshipment and were on direct services to the East Coast of North America,” said Fabrizio De Paulis, managing director of Brazil’s De Paulis Logistics & SCM Eireli.

“Freight rates from ECSA to ECNA are stable with enough capacity and space availability,” he added.