Panama Canal queues reflect global bottleneck dynamics

Politicians, economists, and investors gathered at a Latin American economic forum held in Panama said that global transportation bottlenecks that came into being during the pandemic have shaken industries and consumers, and that can be seen in the current Panama Canal queues.

On May 18th, 101 vessels were awaiting clearance to make the 64km journey through the canal, six units more than the average recorded this year so far, according to Bloomberg.

The Panama canal saw record amounts of cargo passing through its locks in the most recent fiscal year as the trade restrictions between China and the US eased. The country reopened the grain, pork, and liquefied natural gas market.

Moreover, a $5.25 billion expansion inaugurated in 2016 allowed larger vessels from Asia to reach the US East Coast more quickly, avoiding lingering congestion at the ports of California.

US imports of Asian goods arriving on the West Coast fell 3.4% in the first quarter compared to a year earlier, while the number of goods entering the East Coast rose 12.9%, according to freight analysts at Xeneta. Shipments along the coast of the Gulf of Mexico rose 31.1%.

The ripple effects of Chinese lockdowns are starting to be felt. After the flow of vessels through the canal increased by 18% in April compared to the same month in the previous year, the channel is now seeing a delayed effect of Beijing’s “covid zero” policy, said Panama Canal Authority head Ricaurte Vasquez.

“Although the pace may differ and the origin and destination may shift slightly, once the lockdown is normalized, we expect to see orders flowing and products being shipped,” he said

Vasquez said that the situation should stabilize once Chinese factories learn to live with Covid. Transport can adapt as long as the resumption is gradual, especially because the market is still “very strong in ship availability.”

Source: Valor Econômico

To read the full original article, please go to:

https://valor.globo.com/mundo/noticia/2022/05/19/fila-de-navios-do-canal-do-panama-reflete-gargalo-global.ghtml

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