At Panama Canal, container lines come first

At Panama Canal, container lines come first Bulk and breakbulk cargo vessels are increasingly becoming second-class customers when it comes to gaining passage through the Panama Canal.
   The Panama Canal Authority, which recently won overwhelming approval from a Panamanian referendum to expand the canal with a new set of locks, is deliberately catering to the ever-growing container line industry.
   'Everything that we do at the canal right now is aiming at increasing capacity to service the liner sector,” primarily through increasing the availability of booking slots, said Rodolfo Sabonge, director of corporate planning and marketing, during a panel discussion at the Transportation Research Board annual conference in Washington.
      The extra slots are 'at the expense of some other segments that do not book,' Sabonge said.
   Container lines typically run on regular, weekly schedules to keep their networks fluid, maximize their asset utilization and profitability, and serve the needs of their customers. Bulk and breakbulk shipments tend to operate on more irregular schedules.
      Sabonge said the canal is likely to near its sustainable throughput capacity limit in 2008, a year or two ahead of previous forecasts. In 2006 the canal handled 14,194 vessels, including 12,772 oceangoing vessels. In 2004, 12,506 ocean vessels transited the canal.
   As demand to use the canal increased in recent years, the authority instituted an auction reservation system, whereby vessel operators could bid on the value of a slot depending on how urgently they needed transit. A ship that is behind schedule and needs to make up time, for example, can take a slot ahead of other ships by outbidding them for the appointment.
   Sabonge said the original nominal value of the reservation slots was set at $30,000 to $40,000 but that slots are going for $200,000 to $250,000 in the auction process.
   Panamanians who opposed the canal's expansion (digging is scheduled to start in 2008) argued that Panama would be left with an obsolete route and debt because shipping lines would opt for the Northwest Passage as global warming opened up the ice-choked seas to vessel traffic in the decades to come, Sabonge said.
   But Ted McDorman, a law professor at the University of Victoria, Canada, said the Northwest Passage would never be a viable commercial option.
   'The biggest single problem is the lack of predictability. You could build stronger vessels, but you can’t predict when the vessel leaves and arrives from ports' because there will still be many small icebergs that could gash a vessel's hull, he said.