Reynolds Hutchins, Associate Editor | Nov 04, 2015 6:08PM EST
Ocean carriers are canceling services and telling some shippers they can expect weeklong delays due to considerable and unexplained congestion through the Panama Canal.
Various reports have cited adverse weather conditions in the area as El Nino has reduced rainfall and lowered the water levels of the Gatun and Alhajuela lakes, which feed water to the canal’s locks. The canal authority in September restricted the size of vessel drafts passing through the waterway for the first time since 1998. Other reports, however, have cited repairs to existing canal locks as an explanation for the delays. The Panama Canal Authority, however, has not responded to multiple JOC.com requests for comment on the factors behind the backlog, nor the measures that were being taken to remedy them.
Vessels awaiting transit are now facing up to 10-day delays, carriers have told shippers this week, far more than the average transit times of 24 to 30 hours.
The canal was experiencing significant vessel traffic as of Wednesday afternoon. Twelve container ships were transiting the canal and 22 others were awaiting transit — 17 on the Pacific side and five on the Atlantic, according to data from AIS Live, a sister product of JOC.com within IHS.
The congestion began to mount in the last month, according to freight forwarder OEC Group. “Beginning in mid-October, the Panama Canal began experiencing congestion issues on both the Atlantic and Pacific sides,” the company said in a message to customers on Tuesday. Now in early November, the company said, “vessels are currently waiting several days at anchor before being granted entry to the canal.”
Cosco Container Lines has told customers that at least eight vessels have been delayed or otherwise impacted by the congestion. One ship, the Cosco Auckland, is facing a 10-day delay, the company said.
CMA CGM announced it would cancel its Manhattan Bridge Service effective Nov. 12, terminating service to the Port of New York-New Jersey and Virginia for the vessel Amalthea on its Vespucci service rotation. “Due to operational issues resulting from delays in transiting the Panama Canal, there has been a decision to cancel the sailing,” the company told customers.
Cargo bound for New York-New Jersey and Norfolk, Virginia booked on the Amalthea, originally scheduled to arrive in New York on Nov. 4, has been transloaded to a new ship in Cartagena and will be delayed approximately nine days. The carrier said it would continue making adjustments to ensure service continuity.
Cosco’s message to customers cited reports that “weather conditions” were behind the recent backlog. Those reports, however, could not be corroborated Wednesday afternoon.
The canal faced a similar backlog in March and April that was pegged to the lingering effects of U.S. West Coast port congestion tied to slowdowns during protracted contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association. There was no clear cause for the most recent delays, however.
The canal, which is undergoing a $5.25 billion expansion project, has been facing delays of its own of late. The newly expanded canal will allow container ships capable of carrying more than 11,000 20-foot-equivalent units to transit the waterway, more than twice the vessel size that can pass through the existing locks. The project is expected to be completed by April, but some of the newly installed locks have begun to leak and repairs will be more extensive than previously indicated, authorities have said, leaving the date for their completion uncertain.
The central concern for the shipping industry is the extent repairs to leaking locks could delay the commercial opening of the expanded waterway. The canal authority has said Grupo Unidos Por el Canal, the consortium building the locks, hasn’t changed the date for opening of the new locks, despite seepage in a sill tied to a problem with steel enforcement.
Panama Canal Administrator Jorge Quijano has assured shipping leaders that the canal’s new, larger locks should open on schedule. The nation’s foreign ministry already has sent invitations to some 70 heads of state for the opening ceremony.