How the Panama Canal traffic jam is affecting ocean shipping
December 2, 2020
Since the Panama Canal debuted its larger Neopanamax locks in 2016, the three heaviest users have been container ships, liquified natural gas (LNG) carriers and liquefied petroleum gas (LPG) carriers. Now, transit demand for all three segments is simultaneously surging. On top of that, COVID issues are reportedly affecting canal operations.
The consequence over the past month and a half: transit delays.
The good news for containerized cargo shippers is that container lines have reserved booking slots. The delays are affecting ships without reservations.
The good news for LNG and LPG shipowners is that delays are actually a tailwind for returns. Every day a bulk-cargo ship is stuck waiting at anchorage off Panama is a day less it can vie for spot contracts at the end of its voyage. Less competition equals higher rates.
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