Panama canal Authority extends relief for shippers to assist in traffic decline
“Despite the challenges faced earlier this year, I am confident we will see a steady recovery going into our 2021 Fiscal Year for both the Canal and its customers,” said Panama Canal Administrator Ricaurte Vásquez Morales.
The Panama Canal Authority declared that it will expand transitory help measures for shippers utilizing the Panama Canal for the remainder of 2020. This is being done to support the shipping industry at a time when the canal is encountering decreases in traffic due to blank sailings and the lack of the cruise ship business.
This provision and relief measures which begun in May, and is intended to last until September 1, include the suspension of advance payments for transit reservation fees and other changes to the waterway’s reservation system. Together, they allow customers to maintain higher liquidity, as well as added flexibility for swapping or substituting booking slots among their own fleets.
According to figures released by the Panama Canal Authority, transits increased from 845 in June to 933 in July, and August is showing a similar trend. They said the increase was largely driven by a surge in containership transits along the U.S. East Coast to Asia route.
“I am encouraged by the growth we are seeing for the container segment, though we are tracking changes in global trade flows vigilantly,” said Deputy Administrator Ilya Espino de Marotta. “The extension of these measures underscores our commitment first and foremost to our customers.”
Even though there is some seasonality to the canal traffic, transits of the Panama Canal fell in general during the spring due to the shipping industry’s response to COVID-19. In May, the Panama Canal experienced a more than 20 percent shortfall on transits versus budget with just 925 ships using the waterway and more than 250 canceled transits. Approximately half of the canceled transits came from LNG and LPG carriers.
The Panama Canal experienced a decline each month in the start of 2020. January was its peak with 1,283 transits falling to 1,226 in February and 1,210 in March. The biggest downturn came in April where the traffic level fell to just over 1,000 transits, prompting the Canal Authority to introduce the current relief measures for shippers.
Source: TheMaritime Executive
Author: Bernice Noi Tetteh
