Panama Canal: Inchcape supports the green route for shipping trade

If you fail to plan, you plan to fail. And this is especially true for ship transits on the Panama Canal that is a vital shipping trade route connecting the Pacific and Atlantic oceans.

As well as carrying around 5% of global trade every year, the artificial waterway is also an important ‘green connection’ as it contributes to a significant reduction in CO2 emissions for ships traversing the route – as much as 16 million tonnes last year, up from 3 million in 2020.

That is equivalent to the emissions produced by 3.2 million cars in one year or the carbon sequestered by 248 million tree seedlings grown for 10 years.

This reduction has been achieved through fuel savings for ships passing through the canal relative to a much longer route around the tip of South America via the Magellan Strait, which can add as much as nine days to the voyage duration.

The canal serves multiple trade routes connecting Asia and Europe with the US East and West coasts, as well as Central and South America, and the number of ships plying the route exceeded 12,500 in 2021 after steadily increasing in recent years.

Emissions saving

According to the Panama Canal’s emissions dashboard, the biggest CO2 savings last year were on the Asia-to-US East route at 3.5 million tonnes and containerships recorded the highest reduction of 5.2 million tonnes – with Maersk seeing the largest saving of 933,300 tonnes among carriers using the canal.

The Panama Canal Authority (ACP) aims to make the so-called Green Route carbon-neutral by 2030 also by using electric service vehicles and hybrid tugboats, along with equipment and infrastructure upgrades as part of a $2.4 billion investment. In addition, it is re-using 60% of water used in lockage.

But congestion has been a major challenge for Panama Canal transits as both traffic volumes and the size of ships have been growing.

The canal, which originally had two lanes with three sets of locks, has recently been expanded to capture the market for larger ships with the addition of a third wider lane with two sets of locks for neo-Panamax vessels that opened in 2016.

End-to-end management

Therefore, planning is vital to ensure efficient transits that require detailed knowledge of the ACP’s complex canal product offering – with higher toll fees for pre-bookings, more regular auctions for transit slots and the rest given a transit schedule on a first-come, first-served basis.

This is combined with the need for compliance with a sometimes challenging set of rules and regulations required to navigate the passage.

Inchcape’s Panama Canal port agency teams provide comprehensive end-to-end management of vessel transits based on long experience and extensive expertise, having handled around 1100 passages last year for all types of vessels from containerships and bulkers to LNG carriers and oil tankers.

A key factor in successful transits is communication with the ship well ahead of time to ensure the vessel is compliant with all the requirements, which can include such things as mooring configuration, oil pollution response plans, hull protrusions, bridge wings/shelters and line of sight, to name just a few.

We also ensure customers are well aware of costs based on their circumstance, which determines the cost and pre-payment of tolls to the ACP prior to the ship joining the convoy.

Communication and coordination

At the same time, the Inchcape team can provide detailed advance information on issues such as updates on canal rules, weather forecasts, transit slot availability and expected waiting times, which can be as long as two weeks for vessels queuing to enter the canal.

Effective co-ordination means that services such as underwater hull inspections with drones, bunkering, maintenance and crew changes using Inchcape-provided secure transport can be carried out prior to or following the transit.

All of this ensures global trade continues to flow efficiently along the 82-kilometre canal that is considered the proud centrepiece of Panama’s economy, contributing billions of dollars in state revenue each year after the country assumed full management of the canal from the US in 1999.

But, as a Panamanian, I am equally proud to be supporting ship transits along the canal that play an important role in protecting the environment.