Recession impacts canal traffic
The Panama Canal Authority has revised downward its tonnage forecast for 2009 to 294 million tons from 303.7 million tons last fall.
The number of container line services using the canal peaked in 2006 at 42, fell back to 38 last October and is expected to reach 37 services this year, according to the most recent internal estimates.
The Panama Canal experienced a small dip in the amount of cargo passing through the strategic isthmus in fiscal year 2008. Tonnage declined 1.1 percent to 309.6 million tons compared to 312.9 million tons in 2007, the canal authority reported in October. The figure is a volumetric measurement of the cargo carrying capacity of the vessels transiting the canal, not necessarily the actual amount of cargo onboard.
Containerized volumes were 12.3 million TEUs for the year ended Sept. 30. Container tonnage dipped to 124 million tons from 128 million tons in 2007.
It is the first time since 2002 that canal volumes have not grown. The decline is a symptom of the soft U.S. economy and less demand for imports. U.S. container volumes at major ports were 15.2 million TEUs last year, down 7.9 percent from 16.5 million TEUs in 2007 and their lowest level since 2004, according to IHS Global Insight. Volume for the first six months of 2009 is forecast at 6.6 million TEUs, down 11.8 percent from the 7.5 million TEUs handled during the same period in 2008.
Canal vessel transits remained flat, down 0.1 percent, at 14,702. Container transits dropped, however, from 3,622 to 3,544 during the fiscal year. The canal experienced greater use (3.9 percent) of its electronic reservation system to 8,167 transits.
On the bright side, dry and liquid bulk tonnage increased in 2008. As marine rates for dry bulk ships dropped last year, it became more economical for U.S. grain farmers to ship product by barge down the Mississippi River and then vessel through the Gulf and the canal relative to rail rates to the Pacific Northwest for onward shipment to Asia.
Tanker traffic rose 4.8 percent to 2,067 transits on the strength of petroleum exports from the U.S. Gulf Coast to Chile for electricity production following suspension of natural gas supplies from Argentina, the authority said. Cruise vessel traffic went up 17.6 percent to 241 transits and dry bulk traffic essentially remained constant at 2,420 transits.
The canal expansion will also benefit dry and liquid bulk carriers. The size of dry bulk vessels able to transit the canal will increase from 80,000 tons of carrying capacity to almost 200,000 tons once the expansion is completed, but only 74 percent of the upper end capacity can be utilized because of draft restrictions. The canal will also be able to accept very large crude carriers, but with only a 73 percent utilization rate. Suezmax tankers of less than 200,000 tons of capacity will be able to utilize 90 percent of their capacity.
Officials, backed by most economists, say that despite the current downturn the long-term fundamentals show continued growth in trade and justify continued expansion of the 50-mile waterway. Many experts are cautioning that any recovery will take years and that growth will be flatter than in previous years due to the depth of the global recession.
Rudolfo Sabonge, vice president of market research and analysis, said Jan. 15 at a ports industry conference in Tampa, Fla., that the canal authority is buying forecasting services from seven or eight different econometric firms and averaging the predictions ' a similar concept to how news organizations created their own 'poll of polls' during the U.S. presidential election ' because forecasts beyond 2010 have so much variation.
The Economist Intelligence Unit, for example, predicts global gross domestic product to decline 0.4 percent this year, followed by increases of 1.5 percent in 2010 and 2.7 percent in 2011, with merchandise trade growing 2.5 percent and 4.2 percent those years. Its three-year forecast for the United States includes a 2 percent decline this year, followed by increases of 0.7 percent in 2010 and 2.1 percent in 2011.
IHS Global Insight, however, predicts a 2.5 percent decline in the United States in 2009, followed by growth of 2.2 percent and 3.2 percent in the following years.
The International Monetary Fund estimates global growth to average 0.5 percent this year,
An indicator of how precipitously output has fallen in recent months is the IMF's forecast that China's economy will grow 6.7 percent this year. That is a significant decline for a country that has had double-digit annual growth between 2003 and 2007, and 9.7 percent growth in 2008. As recently as November, the IMF had predicted China would have a GDP of 8.5 percent in 2009.