The Panama Canal is working to develop new products and services for different client segments while managing capacity constraints that have affected operations, particularly following the severe drought impacts of 2024, an executive at the Panama Canal Authority (PCA) said.
Arnoldo Cano, manager of strategic planning at the PCA, outlined plans to make the canal more resilient through future droughts. Additionally, the PCA is working with private and public bodies to come up with new business lines which can guarantee a healthy financial performance.
Cano was speaking to delegates at the logistics conference organized annually by the Latin American Petrochemical and Chemical Association (APLA).
LARGER VESSELS
“The canal’s growth practically since its opening has not been driven by an increase in the number of transits – the growth in volume and canal business has really been driven by growth in transit size, as vessels transit roughly the same number of transits each year but are evidently much larger,” said Cano.
“The expansion with a third set of locks has allowed a significant increase in the number of massive transits, almost a multiplication of cargo volume from that route.”
However, this growth was severely impacted by the 2024 drought, which caused a significant drop in both transit numbers and cargo volumes.
Cano said that ensuring water supply represents one of the most important initiatives to minimize the probability of similar disruptions recurring.
Beyond water security, the canal is developing new business models to serve different types of clients more effectively.
The current booking system operates on a first-come, first-served basis with prior reservations to ensure maximum capacity utilization.
“This model has been successful for certain types of clients, especially service clients and data clients who benefit from the system. But we need alternative approaches,” said Cano.
“We continue exploring alternatives for clients never registered in different businesses, who we think could benefit enormously from different schemes to ensure canal capacity is available to clients, so they have certainty of access to a transit slot when they need to make the decision to transit through the canal.”
The Panama Canal connects more than 180 ports worldwide, making it a critical nexus for international shipping.
Cano said the PCA is working hard to develop “flexible solutions” that provide certainty regarding transit dates, costs and capacity availability while maintaining the waterway’s sustainability.
The PCA continues working on initiatives both independently and in collaboration with government and private sector partners to enhance the value proposition beyond simply reducing transportation costs through shorter routes, he concluded.
The APLA logistics conference ran in Panama City on 20-21 May.
Source: ICIS by Jonathan Lopez
