Ocean Freight Update: Panama Canal Transits Further Down, Slow Steaming Ships, Capacity Growing Fast, and more…
What’s happening on and around our oceans?
This is our weekly ocean freight update, highlighting interesting news and background articles we came across this week. We focus on general ocean freight news, innovation, and sustainability. With the current challenges around the Panama Canal
The Panama Canal
The Panama Canal Authority has again reduced the daily transits. In the absence of rain, there is no other option. Daily transits are down to 31. The normal number of daily transits used to be 40.
On the FreightWaves website, I came across an article looking back at an article from the seventies about the Panama Canal. Canal operations were a hot topic then, too.
Drought is also impacting shipping in other regions
While it continues to prioritise container traffic, overall canal capacity is declining
Although it was billed as a forum for sharp criticism by the American shipping industry of the proposed Panama Canal treaties, Ambassador Ellsworth Bunker’s presentation for the treaty before the Washington, D.C., Propeller Club and the reaction to the Ambassador, seemed to indicate the shipping industry does not really have a strong position for or against the Canal treaties.
From the March 1978 issue of American Shipper:?
Shipowners around the world are concerned, however, that the treaty provision increasing U.S. payments to Panama for use of property in the Canal Zone will mean increased tolls.
Months of dry weather and the hottest summer ever shrunk the vital channel that funnels barges of grain and soybeans from the Midwestern crop belt to Gulf Coast ports. Barge operators now are running lighter loads to compensate for the lack of water.
General Ocean Freight News
Some interesting records have been broken this past week. Bulk carriers and container ships have been moving at the slowest speed on record this year. When it comes to container ships, the capacity has never grown at such a fast pace as now.?
The ship recycling business
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Average containership speeds between January and August were down 3% on the 2022 average, reaching a record low of 13.7 knots in February and despite subsequently ticking up to 13.9 knots in Q3, remaining below the lowest level on record prior to this year.
According to analysis from Asia-based consultancy Linerlytica, the pace of the growth of the box fleet at the moment is the fastest on record – and is set to continue for the next two years with the sight of newbuilds being forced to idle becoming commonplace.?
As we enter the Autumnal season which is classed as the hardest season when leaves fall and trees look bare, the recycling market is currently taking on a similar scenario where activity from the Bangladeshi and Pakistani recyclers are once again meagre, with patchy activity, and only the Indian recyclers showing signs of any positive mood.?
Carriers optimistic the freight market was starting to show signs of a turnaround should prepare for weak conditions to linger possibly into late 2025, according to economic analysts.
Other interesting reads for this segmen:
Sustainability and Innovation
The shipping industry is a big contributor when it comes to carbon emissions. Change is needed fast for the industry to turn this around and minimize its environmental impact. Already, it is getting hard to reach net zero emissions in 2050.
New ships operating on alternative fuels
Tsuneishi Shipbuilding based in Hiroshima, Japan received an order for four 5,900 TEU container ships powered by methanol.
Norway is not only looking at cleaning up its transport system on the road with cars and trucks, but is also looking to make its shipping lanes CO2 neutral and save further emissions. Therefore, a number of projects are now being promoted to help reduce emissions at sea.
As we are around three months away from the implementation of carbon taxation (ETS) in the European Union (EU) and everyone agrees that this will be a high cost, there is significant uncertainty as to the precise cost.
Everyone, it seems, is going to be confused about the EC’s forthcoming emissions trading system (ETS): judging by the initial “stick a finger in the air to see which way the wind is blowing” attempt by Maersk and Hapag-Lloyd to calculate possible surcharge levels (and the complete silence from their peers), shipping lines have the vaguest of vague notions.
“Clearly, action by governments and industry are not yet aligned to the NZE 2050 roadmap and appear unlikely to do so in the near term. Sensitivities in the timing and uptake of alternative fuels, energy sources and abatement technologies will be key. Volatility in commodity supply, demand and prices may also increase, as investment moves away from traditional energy sources, perhaps at times out of sync with demand. More policy is needed both at the government and NGO level, however, investment in shipping, both for new forms of energy, existing non energy cargoes and carbon will be a critical success factor behind the energy transition”, Gibson concluded.
Other interesting reads for this segment:
That’s all for this week!
Photo by Venti Views on Unsplash