Title: Panama Canal Customer newsletter
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Permanent Link: http://ufdc.ufl.edu/UF00099413/00004
 Material Information
Title: Panama Canal Customer newsletter
Physical Description: Serial
Language: English
Publisher: Autoridad del Canal de Panama
Place of Publication: Balboa, Panama
Publication Date: September 2000
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Bibliographic ID: UF00099413
Volume ID: VID00004
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.

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Paunama CanalCP



SOptormer 2000



Message from the Canal Administrator on the Canalls First Nine Months Under

Panamanian Administration


in e

m n t h s
h a v e
p a s s e d

since the

historic

transfer of

the Panama

Canal to

Panama on

December

31,1999, in
accordance

with the

Torrijos-Carter Treaties of 1977. As the
Canal prepares to begin its new fiscal

year on October 1, 2000, I would like to
take this opportunity to reflect on the

accomplishments of the past year and

share my views on the future.

The transfer of the Canal was a

historic, emotional and long awaited

milestone for the Panamanian people.

As promised, the process was seamless.
Nevertheless, there was some lingering

national and international speculation

about the future of the waterway. We

are very pleased that Canal customers

and industry leaders are now openly

expressing their satisfaction that the

Canal has continued operating

efficiently and safely, supported by a

highly skilled and well trained work

force, just as it has in the past. More

importantly, they have tremendous
confidence in the future success of the

waterway. An important element in the

transfer process was to restructure the

Canal organization into a businesslike

entity, with a strong focus on customer

satisfaction and service. Although we

have made excellent progress we

continue to examine our organizational

structure, work methods and available

technology to improve our performance.

We have also made changes to comply

with the new organic law that governs

the operation of the Canal. The new law

requires that the Canal be profitable and

generate a benefit to the country.


Additionally, we established an

Advisory Board comprised of

prestigious international industry

leaders to provide advice to our Board
of Directors.

To ensure that the Canal would

be prepared to meet the demands for

the new millennium I ordered a

thorough review of all projects

designed to modernize and increase

Canal capacity. The most important

project was the widening of Gaillard

Cut, initiated in 1992 with a scheduled

completion date of 20 years. Shortly

after my appointment as Canal

Administrator in 1996, we compressed

the completion date to ten years. We

are now expecting to complete that

project a year earlier than our revised

projection. The widening of Gaillard

Cut will allow virtually unrestricted

two-way transit of Panamax vessels,

the largest vessels that the Canal can

presently handle, and increase Canal

capacity by about 20 percent. Other

achievements include purchase of

new electric towing locomotives,

replacement of locomotive tow track,

upgraded equipment and machinery at

the locks, new floating equipment

such as tugs and launches, and the

installation of a new state-of-art vessel

traffic management system. Our well

planned maintenance programs

ensure the continuous operation of the

Canal 24 hours per day, every day of

the year.

Operationally, since the transfer

of the Canal to Panama, 9,307 vessels

have transited the waterway,

generating tolls revenues of slightly

more than $428 million. Panamax

vessels represented 35 percent of all

oceangoing transits. Grains remain

as the leading commodity passing

through the Canal, followed by the

growingcontainertrade. Water is the

key natural ingredient that keeps the

Canal functioning. Current and future


Canal capacity enhancements will place

greater demands on existing reservoirs.
To address this concern Panama's

legislature passed a law giving the Canal

the authority to expand and manage its

watershed. The new boundaries for the

watershed will allow the Canal to

develop water resources capable of

supplying ten times the amount of usable
fresh water that we have today.

The future presents many challenges

for the Canal and the global

transportation system. The expanding
use of the internet and e-commerce are

reshaping the business landscape.

Goods must be delivered sooner and at

the lowest cost. Globalization and

changes in trade relationships are

shifting trade sources and destinations.

Key ports around the world are being

privatized and improved to handle mega

vessels and move more cargo in less

time. The demand for post-panamax

newbuildings is greater than originally

anticipated. These factors are placing

increasing pressure on every element in

the transportation network. To respond,

the Canal basically has two choices.

We can squeeze the last ounce of

efficiency out of the existing Canal, or
we can move to a new level with an

expanded waterway capable of

handling greater trade volumes. The

Canal has chosen to prepare a

conceptual plan for the expansion of the

waterway. After this process has been

completed the final decision will rest

with the people of Panama.

Every Panamanian has a right to

feel extremely proud of the successes

enjoyed under Panamanian

administration, Although many perceive

that the transition was over upon transfer

of the Canal, in reality it is just

beginning. There is a lot of work that

remains to be done, but we are well

prepared for the challenge.











Panamax Vessel Transits Continue Growing


Transits by Panamax vessels, the
largest vessels that can transit the
Panama Canal with beam dimensions of
100 feet and over, rose 3.5 percent to
4,012 transits during the October to
August period of fiscal year 2000
compared to the 3,878 transits recorded
during the same period in fiscal 1999.
Sustained growth of Panamax vessel
transits in the Canal started in the early
1970's when they accounted for about
300 transits or 2.0 percent of the total
oceangoing transits. Today, Panamax
vessels share about 35.0 percent of total
oceangoing transits and carry over 62
percent of total cargo transported
through the waterway. Dry bulk carriers


share almost 34.7 percent of
total Panamax transits, followed
by containerships that account
for 25.1 percent. Transit growth
for containerships has been
consistently positive, averaging
6.7 percent per year in the last 4
years. On the other hand,
transits by Panamax dry-bulk
carriers has had ups and downs,
transit growth for this category
has reported rates between -54.1
percent and 90.7 percent, a reflection
of market volatility corresponding to
major commodity trades. The
increased proportion of transits by
large vessels intensifies the usage of


Canal resources. Therefore, Canal
authorities are undertaking studies to
further enhance Canal capacity, given
the pattern of increased vessel size.


Canal Transits and Cargo Information


During the first eleven months of
fiscal year 2000, oceangoing transits
totaled 11,353, a decrease of 2.8 percent
relative to 11,685 transits recorded in the
same period of fiscal year 1999. Despite
that fewer transits have been recorded
in the period, tolls revenue has
increased 0.3 percent to 528.1
million, given the increase in transits
by larger vessels. Transits by full-
containerships and vehicle carriers
have been particularly strong relative
to lastyear. On the other hand, total
cargo tonnage for the October-August
period of fiscal year 2000 registered
177.1 million long tons, a 2.2 percent
decline compared to 181.1 million
long tons recorded during the same
period in the prior year. Grain
shipments, the leading Canal
commodity group dropped 10.5 percent
to 36.3 million long tons from the 40.6
million long tons in the same period last
year. Asurplus of 5 million metric tons of
corn from China has been available for


export to Asian countries during
marketing year 1999/2000. This has
negatively affected US corn exports to
that region, through the Canal.
Containerized cargo, the second


- IY199[3Y0


most important commodity group,
continued strong during the eleven
month period of FY 2000. This trade
rose 11.8 percent to 30.4 million long
tons from the 27.2 million long tons
registered in the prior year. Container
trade accounted for 17.2 percent of


total Canal cargo tonnage. The major
Canal trade route for containerized
cargo is the East Coast United States -
Asia (both ways), which accounted for
12.6 million long ogns or 41.6 percent of
the Canal containerized flows
during the first eleven months
period ofFY2000. On the other
hand, Petroleum and products, the
third major commodity group in the
Canal trade, decreased 9.1 percent
to 23.9 million long tons during the
first eleven months of FY 2000,
compared with 26.3 million long
tons in the same period in FY 1999.
This trade through the Canal has
weakened due in part to OPEC
restrictions in production and
increased trade diversion to routes that
do not pass through the Canal. The
above chart shows the major Canal
commodity flows for the first eleven
months period of FY 1999-2000.


Traffic forecast for the Canal up to 2050


A meeting was held with Richardson
Lawrie & Associates, after they were
awarded a contract to develop a forecast
of Canal traffic to be used for the Canal
expansion studies. This forecast will be
independent to those performed in-
house and they will also serve to validate
those done by the Canal's Marketing
Division. The contracted study includes
patterns of world trade by market
segment analyses and a quantitative and


qualitative approach to determining
expected Canal traffic under the
constrained, unconstrained and
expanded scenarios for the Canal
capacity. Several years ago,
Richardson Lawrie & Associates
performed studies and forecasts for the
tripartite committee comprised of
representative from Panama, the
United States and Japan that was
studying Canal Alternatives.


SEE THIS NEWSLETTER ON
THE ACP WEB SITE AT:
www.pancanal.com
(then click on "Canal NIws")


I~









Visits by Clients and Users

CMA-CGM


On June 19, Mr. Rodolph Saade,
General Manager, CMA-CGM, The
French Line, accompanied by Mr. Andy
IP, Regional Manager, CMA-CGM Ltd.
(Asia), who is responsible for the Asian
region and the Trans-Pacific service,
visited the Panama Canal. They had the
opportunity to go to the Vessel
Management and Admeasurement
Section of the Marine Traffic Contro
Center, to learn the details of the transit
reservation and scheduling system for
vessels transiting the Canal. Later, they
visited Miraflores Locks, where Mr.
Saade had the opportunity to operate the


Hyundai Merchant Marine

On June 21, Captain S.C. Kim, a
representative for Hyundai Merchant
Marine, visited the Canal's Customer
Relations Office. He later went to
Miraflores Locks, where he had the
opportunity to go inside of the locks
Control House and receive information
on the Panama Canal.
On July 12, in follow up to Captain
Kim's visit, another visit was made to the
Canal by a separate delegation from the
Hyundai Merchant Marine, comprised
of Messrs. W.J. Choi Executive Vice-
President of Logistics and Terminals in
Seoul, K.S. Park Executive Vice



Taipei Mayor
On Wednesday, August 16, the
Mayor of Taipei, Ma Ying-Jeou, arrived
at the Canal as a guest of the Mayor of
P anama, Juan
Carlos Navarro.
U pon h i s
arrival, M r.
Ying-J eou
received a full
briefing on the
waterway from
Mr. Rodolfo
S a bo nge ,
Director of
Corporate Planning and Marketing.
Major Ying-Jeou had the opportunity to
visit the Locks Control House and turn
the levers that activate the locks valves
and miter gates.


miter gates from the Control House,
visit the locks tunnels. At the locks
they viewed the topographical model.
CMA-CGM recently began providing
all-water service between Asia and the
U.S. East Coast, via the Panama Canal.


-President of Hyundai America in Los
Angeles, and H.S. Jung General
Manager of the Logistics and Terminals
Department in Seoul. The senior
executives of Hyundai Merchant
Marine were given a briefing and a
guided tour.



Jo Tankers

On July 4 5, Mr. Jeroen de Man,
Operations Manager of Jo Tankers
visited the Canal. Jo Tankers transit
the canal operating chemical tankers
in The Netherlands, Germany, United
States, Singapore, Japan, Norway and
the Philippines, and owns a fleet of 42
vessels. On July 4, Mr. de Man met
with Mr. Jorge Quijano, Director of
Maritime Operations and some of his
personnel, to discuss ways to reduce
tranist delays particularly during heavy
traffic periods where demand exceeds
capacity. On July 5, visited the
Contro I House at the Miraflores Locks,
and receivedan orientation on lockage
operations and the Panama Canal.


Canal Officials visit Maersk-

Sealand in Copenhagen


On September 1 Canal
Administrator Alberto Aieman Zubieta
traveled to Copenhagen to meet with Mr.
Knud E. Stubkjer, A.P.Moer partner in
charge of MVaersk SeaLand business and
Jess Sodeberg, President of the
A.P.MoiHer group at its headquarters in
Copenhagen.
Mr. Aieman was accompanied by
Rodolfo Sabonge, Director of Corporate
Planning and Marketing; Chet Lavalas,
Canal Port Captain; Yoemy Waller,
Marketing Manager; and Silvia Marucci,
Marketing Research Manager. The
purpose of the meeting was to discuss
technical issues about Canal s
expansion plans and industry
requirements for the long-term future. A
special topic of discussion was the
optimal lock size required if the Panama
Canal should consider expansion to
acco mmodate Post Pana max vessel.




China Ocean Shipping

Com pany (COSCO)


A delegation from China Ocean
Shipping Company (COSCO) visited
Miraflores Locks in the afternoon of
Monday, July 31. The COSCO
delegation was comprised by Captain
Cai Meijiang, COSCO Panama
Manager; Shen Ju Gen, Assistant to the
President of COSCO America Inc.; Yang
Gen Cai, Manager, AEX Container Line,
COSCO; and Shen Wei Jun, COSCO
Operator, AEX Line. During the
morning, the Administrator and senior
executives of th Canal briefed the
delegation on the Canal booking system
and maintenance programs. COSCO
representatives made suggestions to
resolve backlogs and booking problems.











Panama Canal Wins International Award in

Geographical Information Systems


The Panama Canal Authority
received the international Special
Achievement Award in Geographic
Information Systems from the
Environmental System Research Institute
(ESRI), one of the world s leaders in
geographic information system program
development.
The prize was awarded on June 29,
2000, during the 20th Annual
Conference of ESRI Users held in San
Diego, California, with the participation
of more than 9,000 attendees fro m all


over the world. The ACP was selected
from among 60,000 GIS sites for best
implementation and use of
technology.
GIS systems combine data,
personnel, procedures, and computer
hardware and software to integrate
geographic information and other
elements and create accurate, finely
detailed digital maps that depict a
broad range of visual elements, such
as structures, topography, and rivers,
recreated from digital and printed


maps and plans, aerial photographs,
remote sensors (satellites, radar and
laser), GPS coordinates and
topographical surveys.
The ACP's Geographic Information
Systems Unit is in charge of technology
application and services to all ACP
departments, generating customized
maps and organizing geographical
information into integrated systems for
creation of digital maps showing ACP
operational areas, buildings, utility
lines, and Canal land and waters.


South American delegation

(ROCRAM)

On Friday, July 21, the participants
to the Regional Seminar on Facilitation
and Port Optimization organized by the
Regional Operative Network of Co-
operation among Maritime Authorities
of South America, Mexico and Panama
(ROCRAM), under the auspices of the
International Maritime Organization
(IMO), visited Miraflores Locks. The
delegation, comprised of more than 70
participants, and headed by Rear-


Customer Outreach Efforts

The Panama Canal Administrator
and other Canal officials, including the
Director of MIaritime Operations and the
Director of Corporate Planning and
Marketing, traveled to several Asian
countries to visit customers, update
them on the progress of Canal modern-
ization programs, and discuss the
conceptual aspects of the master plan for
the expansion of the waterway so that
the Panama Canal continues serving the
needs of its users and customers, well
into this new century.
The itinerary included visits to top
customers in Tokyo, Seoul, Taipei, Hong
Kong, Beijing and Shanghai. As a guest
of the Japanese Government, Canal
officials met with the Vice Minister of
Transport for Technical Affairs and also
with representatives of the Japan
Federation of Economic Organizations
(KEIDANREN). The Director of
Corporate Planning and Marketing
made a presentation to the Japanese


Admiral Marcia Gonzalez, Secretary
Genera of ROCRAM, who was
accompanied by Mr. Hartmut Hesse,
IMO Representative, and Ms. Patricia
McCauley, Deputy Director ofthe


Shipowners' Association. While in
Seoul, the delegation met with the
Vice Minister of Maritime and Fishing
Affairs, and during their visit to Hong
Kong, Canal officials made a presenta-
tion to the Hong Kong Ship owners
Association.
This session of visits offered an
outstanding opportunity to share with
Canal customers the efforts being
made to ensure that the Canal remains
the route of choice for many years to
come. This trip also served to
exchange valuable industry informa-
tion, strengthen customer ties and
expand lines of communication.


World Customs Organization.
Representatives from Ecuador,
Venezuela, Chile, Guatemaia, Uruguay,
Brazil, Cuba, Mexico, CoIombia,
Argentina, Bo ivia and Panama, were
briefed on the Panama Canal and had
the opportunity to see dry chamber
maintenance work in Miraflores. Canal
officials explained maintenance projects
, the improvement and modernization
plan, and the impact of these works on
current transits, as well as expected
benefits upon completion of these
programs.




Upcoming Conferences

Canal Administrator, Mr. Alberto
Aieman Zubieta, has been invited to be
a speaker at the 89th Annual
Convention of the American
Assiati on of Port Authorities (AAPA)
to be held at The Continental Plaza in
Veracruz, Mexico from October 16 to
19, 2000. Mr. Aieman's presentation
will address, "Global Economic Trends
and Prospects for Trade Liberalization
during the Tuesday session on October
17, 2000. For more information
regarding this convention visit the
A A PA' s w e b s i e a t
www...aapa2000.com.mx/indexw.htm
Mr. Aleman has also been invited to
make a presentation at the Intermodal
2000 Conference and Exhibition to be
held in Genoa, Italy from November 29
to December 1. His presentation will
cover the Prospects for the Panama
Canal in the Global Intermodal
Network". See web site at
www.iirexhibitions.co.uk/modal/indx.
htm


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