Business, Freight News, Sea

Panama Canal reports record tonnage in FY21

[ November 17, 2021   //   ]

The Panama Canal began its Fiscal Year 2022 (FY22) at the start of October, marking the end to a year of record-breaking traffic at the waterway and global supply chain disruptions worldwide.
The Panama Canal saw record tonnage in 2021 fiscal year (FY21). Between October 2020 and September 2021, 516.7 million Panama Canal tons (PC/UMS) passed through the waterway, carried mainly by containerships (184.3 million PC/UMS tons), as demand for consumer goods increased sharply in the United States. We anticipate traffic levels for containerships will be similar in FY22, as high demand for containerized cargo imports in the U.S. continues.
Across all traffic segments supported, liquefied natural gas (LNG) carriers registered the highest increase in tonnage through the waterway in FY21, with almost a third (31.4 percent) more LNG carried through the Panama Canal compared to the previous year.
“We also saw the highest ever LNG transits and tonnage facilitated by the Panama Canal team overall this year, no small feat given the segment only began transiting the waterway for the first time after the completion of the Panama Canal Expansion in June 2016,” said the Panama Canal, Administrator Ricaurte Vásquez Morales.
This increase was largely due to record low temperatures during the winter in Asia, heightened demand for energy during what was already peak season.
In addition, grain exports through the Canal increased as U.S. exporters meet soybean demand to feed livestock and poultry in China.
“We were able to accommodate this shift in the market by staying flexible with our transit reservation system and operations,” Vásquez Morales said. “In the past five years, our team has gained tremendous experience supporting and adapting to the needs of the segment, which has solidified the Panama Canal as a safe, reliable route for LNG.
As more LNG terminals in the East and Gulf Coasts of the U.S. open or expand their operations and increase exports to Asia, he expects the segment will only continue to rely on the waterway more for at least the next three years.
Despite continued challenges, the Panama Canal had a landmark year thanks to its workforce and their commitment to serving world trade without interruption.
Going into FY21, Canal officials knew the residual impact of COVID-19 would continue to affect supply chains. “We readied our workforce for this situation,” he said.
Between October 2020 and September 2021, containerized cargo imports to the United States grew 19% as consumers began to spend money saved during the pandemic. The lack of ships to supply this growing demand coupled with congestion issues at ports, and high freight rates tightened the supply chain.
The Canal managed these shifts by keeping operations agile, forecasting market trends to ensure uninterrupted service to its customers, while keeping safety at the center of its operations. For example, the Canal made changes to accommodate larger ships, increasing the maximum allowable length (LOA) for vessels transiting the Neopanamax Locks in June 2021 to allow 96.8% of the world’s fleet of containerships to transit the Canal. In addition to the increased LOA, the Canal also maintained a 50-foot draft, the highest level allowed at the waterway, benefitting customers who were able to transport more cargo.
“While we have been able to stay agile and flexible to continue offering reliable service through this past year’s challenges, we have not lost sight of the future,” he adds. “Therefore, through the past year, the Canal continued to advance its commitments to the environment, through sustainability and innovation.”