Title: News from ... the Panama Canal
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00099414/00004
 Material Information
Title: News from ... the Panama Canal
Physical Description: Serial
Language: English
Publisher: Autoridad del Canal de Panama
Place of Publication: Balboa, Panama
Publication Date: June 2003
 Record Information
Bibliographic ID: UF00099414
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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The Return of the All-Water Route

During the last few years, containerized cargo
flows through the Panama Canal on the Asia -
East Coast of the United States route have been
experiencing significant growth as a result of the
shippers' increased demand for all-water
The preference for the all-water route, or the
decision to move cargo by water, is being
propelled by several factors, the most important
one is the fact that major U.S. importers are
relocating part of their operations to the East
Coast, where 75% of the consumer market is
concentrated. Companies like Wal-Mart, Home
Depot, and Target Stores have established large
regional distribution centers (DC) close to ports
such as Savannah, Norfolk, and Houston.
Shippers, as well as major retailers, are
recognizing the various important advantages
offered by the all-water route. These
advantages include reduced transportation and
cargo handling costs, simplified and more direct
cargo routing, while experiencing one of the
most reliable, safe, and secure methods for
moving cargo. The adverse impact of the October
2002 West Coast port shutdown and the fact that
all-water services provide more direct calls to
ports near the major consumer markets have
also been instrumental in tipping the scale in
favor of all-water.
Another important variable that motivates the
preference for the all-water route is security. A
potential security problem occurs every time
cargo changes hands. The all-water route
transports the cargo from the port origin to the
port of final destination, minimizing the potential
risks associated with the possible tampering or
contamination of the cargo as fewer hands are
involved in the handling operation. Likewise the
all-water option eases expenses in low value
cargo by reducing inventory-carrying costs as
the cargo stored in a container while in-route is
treated as part of the distribution center's
inventory. By treating the container as an
inventory storage option, the capital expenses
associated with the establishment of distribution
centers are reduced as there is less need to
expand the existing facilities.
All of these factors create a favorable scenario for
the Panama Canal. It is expected that the all-
water route will grow at the pace of the US East

Coast distribution centers. The growth in
northeast Asian markets and the commercial
boom that has resulted from the incorporation of
China to the World Trade Organization is also
contributing to the increase in the all-water trade.
Presently, the Panama Canal is well prepared to
handle greater cargo levels as a result of the
timely implementation of major improvement and
modernization programs. These include the
widening and deepening of the waterway,
technological upgrades, and the streamlining of
Canal operations.

Panama Canal Results in
Savings to Customers

This year, several shipping lines are introducing
new liner services through the Panama Canal to
serve the increased demand for the movement of
containerized cargo on the Asia East Coast of the
United States route.
The all-water route through the Panama Canal
represents significant cost savings to importers
and shippers. Mr. Larrabee, Port Commerce
Director of the Port of New York and New Jersey
estimates that it costs between $200 and $300
less to move a container between China and the
Port of New York and New Jersey through the
Panama Canal, than moving the same container
through the west coast landbridge. The Port of
New York and New Jersey receives fifteen all-
water services on a weekly basis, and thirteen of
them use the Panama Canal.


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Containers Still Rising

Canal cargo tonnage reported an overall increase of 1.2
percent to 111.1 million long tons in the seven-month period
(October-April) of fiscal year 2003, up from 109.8 million long
tons recorded in the same period in fiscal year 2002.
Containerized cargo continues to be the leading commodity at
the Panama Canal while holding a 24.1 percent share of total
cargo tonnage. Containerized cargo recorded a 25.7 percent
increase to 26.8 million long tons for the seven-month period,
compared to the same period of fiscal year 2002. This cargo
increase can be attributed to new services using the Canal
route and the rerouting of cargo through the Canal in response
to the U.S. West Coast port strike.
Grains have remained in second place, even as tonnage levels
for the first seven months of the fiscal year rose by 7.4 per cent
to 24.1 million long tons. Larger grain movements, mainly
soybeans, were destined to China to satisfy the growing oil and
soy meal consumption in that country. As expected,
petroleum and petroleum products, the third commodity group
in importance for the Canal, declined by 29.1 percent to 11.2
million long tons. This decline was the result of a reduction in
the exports from Ecuador and Venezuela, the most important
producers in the region and key users of the Panama Canal
within this segment. High oil prices, coupled with a worldwide
economic slowdown, have caused a contraction in the demand
for crude petroleum of the OECD member countries, including
the United States.
The adjoining chart provides cargo tonnage comparisons for
the first seven months of fiscal years 2003 and 2002.

Major Canal Cargo Flows October-April

Container Cargo

Petroleum and
Petroleum Products
Ores and Metals
Nitrates, Phosphates
and Potash
Refrigerated Foods
Chemicals and
Petroleum Chemicals
Manufactures of Iron
and Steel
Coal and Coke

Lumber and Products

Panamax Vessel Transits
Remain Strong
Preliminary traffic statistics for the first seven months
(October- April) of fiscal year 2003 show that transits by
Panamax-size vessels, the largest vessels that can pass
through the Canal locks, are continuing to rise. Statistics
indicate that 2,805 Panamax vessels transited the
waterway, about 7.0 percent more than the 2,621 transits
registered for the same period in fiscal year 2002. The
adjoining graph illustrates a monthly comparative
breakdown by fiscal year.

Panamax Transits 100' Beam & Over

Oct. 355 379 6.8%
Nov. 389 397 2.1%
Dec. 370 417 12.7%
Jan. 395 421 6.6%
Feb. 346 398 15.0%
Mar. 383 417 8.9%
Apr. 383 376 -1.8%
Total 2,621 2,805 7.0%

Canal is Running

Safer than Ever

As of April 29, 2003, the Panama Canal registered a total of
172 continuous consecutive days without a marine accident
investigation, surpassing its own safety record. The prior
longest period without marine accidents was recorded
twenty years ago in 1963, when the Canal experienced 75
consecutive days without serious marine accidents. This
success confirms the commitment of the Panama Canal's
labor force to provide the highest quality service to the
maritime industry.

/ AIS required on July 1

Effective July 1, 2003, the Panama Canal Authority will
I require that all vessels over 300 gross tons or over 20
meters LOA transiting the waterway be equipped with an
I FY2003 automatic identification system (AIS) transponder that
SFY 2002 meets the standards set by the International Maritime
Organization (IMO).
To facilitate the implementation of this requirement without
affecting those customers that do not have AIS systems
installed on their vessels, the Panama Canal will have
available for rent AIS-ready vessel tracking portable units
at a nominal rental fee of US$150.00, from July 1, 2003
through December 31, 2003.
__ The implementation of this satellite-based vessel
o 5,000 10,000 15,000 20,000 25,000 30,000 navigation aid for commercial vessels will result in reduced
Thousand Long Tons delays, improved safety, increased security and better
logistical management of vessels, the Canal, and dock

Wallenius Selects Panama as a
Transshipment Hub
In March of 2002, Wallenius Wilhelmsen, the world's largest
automobile and ro-ro transportation company, designated
Manzanillo International Terminal (MIT) as hub for its service to
and from South America. MIT now serves as the principal link
between Latin America and the rest of the carrier's global
trading network. The hub concept has allowed the company to
link previously unrelated service routes and create a more
efficient and comprehensive service network throughout the
region. The majority of the hub's cargo volumes to-date have
come from Brazilian ports- originating business destined for
other parts of South America, Central America, the Caribbean,
Mexico, and the U.S., as well as Australia, New Zealand and

Transshipment operation at MIT

The Manzanillo hub gives Wallenius Wilhelmsen access to
several new markets and opens up new trade opportunities.
According to Jan-Eyvin Wang, President of Wallenius
Wilhelmsen for the Americas Region, "This move further
reflects the company's positioning of South America as a key
component of our global trading network."
Manzanillo's location at the Atlantic entrance to the Panama
Canal is ideal, as Wallenius Wilhelmsen's vessels in transit
between Europe, North America, Oceania, and Asia already use
the Panama Canal in their regular service patterns. The vessel
deviation and port time are minimal. Plus, MIT's accessibility
(operating 24 hours a day, seven days a week) has been
important to the success of the Wallenius Wilhelmsen's hub
concept in Panama.

Second Tolls Adjustment
Set for July 1
In August of last year the Cabinet Council of the Republic of
Panama approved a two-phase increase in Panama Canal
tolls and a change in the waterway's pricing structure.
The first phase of the tolls increase resulted in an average
increase of approximately 8 percent, which was
implemented on October 1, 2002; and the second phase,
consisting of an average increase of 4.5 percent, will take
effect on July 1,2003.
During last year's tolls hearings the Canal had proposed a
single increase that was slightly higher than the total two-
phase increase that was ultimately approved by the
Cabinet Council. The decision to approve a lower two-
phased increase was primarily in response to compelling
economic concerns expressed by a number of
international participants in the hearing process. The
Panama Canal remains committed to providing its
customers with safe, efficient, and dependable transit
service at a fair price. Canal officials will also continue to
explore new services that will result in added value to
customers and the waterway.

JULY 2003

Type of vessel

General cargo
Refrigerated cargo
Dry bulk
Container ships
Vehicle carriers
Passenger ships

Irsit lu,uuu
tons (PCIUMS

Next lu,uuu tons

Remaining tons

Laden Ballast Laden Ballast Laden Ballast

Displacement $1.64/displacement ton
* Minimum tolls will remain the same

Dates Duration Locks Nature of Maintenance

For additional information visit our website www.pancanal.com

June 2- 12 11 days Pedro Miguel Rehabilitation of 1,514 ft. of locomotive track on west sidewall and centerwall
July 7 17 11 days Miraflores Rehabilitation of 2,127 ft. of locomotive track on southeast approach wall
July 7 17 11 days Pedro Miguel Conversion of 8 rising stem valves on east lane dry chamber
Aug. 11 -22 12 days Pedro Miguel Rehabilitation of 2,445 feet on west wingwall
Sept. 1 1 day Pedro Miguel Final phase of hydraulic conversion of rising stem valves on central-wall culvert
Sept. 15 25 11 days Miraflores Rehabilitation of 1,705 ft., on east approach wall
Sept. 15-25 11 days Gatun Dry chamber miter gates 9 10 17 18

Outreach Efforts

In June and July 2003, the Minister for Canal Affairs and
President of the Panama Canal Board of Directors, Mr. Jerry
Salazar, and the Panama Canal Administrator, Mr. Alberto
Aleman Zubieta, will represent the Panama Canal in an
official ceremony that will lead to the signing of
Memorandums of Understanding (MOU) between the
Panama Canal Authority and the Port Authority of New York
and New Jersey, Georgia Ports Authority, Virginia Port
Authority, Port of Miami, and South Carolina State Ports

President & CEO of COSCO
Visits the Panama Canal
Captain Wei Jiafu, President & CEO of the Chinese Ocean
Shipping Company (COSCO) and member of the Panama
Canal's Authority Advisory Board, visited the Canal on April
11 along with a delegation of eight executives. During his
visit, captain Wei Jiafu said, "The administrators of the
Canal are doing an excellent job managing and operating
this important waterway. The Canal's modernization and
improvement projects have enabled us to deliver and meet
the demands of our customers by providing goods and
products on-time."

IEEE Award presented to the
Panama Canal

On April 4, during an official ceremony held at the Panama
Canal Administration Building, Mr. Michael S. Adler, President
of the Institute of Electrical and Electronics Engineers Inc.
(IEEE) honored the Panama Canal Authority with its coveted
Milestone Award. The award was presented as a tribute to the
efficiency of the waterway's electrical system. Since the
construction of the Panama Canal, improvements and
upgrades have continuously been made to its electrical system
by introducing new technology and adapting to the changing
energy demands of the waterway.
Throughout the years, the Canal has made significant
investments in the maintenance of its electrical equipment and
has always fostered innovative engineering. These efforts
have been fundamental to the Canal's long-standing success
as an engineering wonder of the world.

From left to right: Panama Canal administrator, Alberto
Aleman Zubieta, Captain Wei Jiafu and Mr. Jerry Salazar,
Minister of Canal Affairs and Chairman of ACP Board of
Directors during COSCO visit to the Panama Canal.

Mr. Michael Adler from IEEE and and Mr. Manuel Benitez
from ACP unveiled the Milestone Award Plaque.

Prevention of SARS
As a result of the outbreak of atypical pneumonia, also known
as severe acute respiratory syndrome or SARS, in various parts
of the world, the ACP is taking safety measures to prevent the
possible spread of the disease.
The measures include the requirement that vessels that have
visited any of the affected countries within 30 days prior to their
arrival to the Panama Canal, must report any suspected case of
atypical pneumonia on board. Other measures include, but are
not limited to, boarding of vessels by sanitary health authorities
to investigate possible cases, and the use of personal protective
equipment, such as masks and gloves, by Panama Canal

I We wan you comet fo mor inomto

Your comments and suggestions are very important to us. If you would rather
receive it electronically, please send us a note with your correct email address
to: customerelations@pancanal.com If you need additional copies mailed to
other officials within your corporation, please contact us at the address
indicated in the next box.

Panama Canal Authority
Corporate Planning and Marketing
ACP-CP P.O. BOX 025513,
Miami FL. 33102-5513

Tel. (507) 272-7961
Fax: (507) 272-5916
e-mail: customerelations@pancanal.com

(then click on "Canal News")

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