Not Nicaragua Canal, Not Mexico But This Will Shut Down The Panama

Not Nicaragua Canal, Not Mexico But This Will Shut Down The Panama

the country is officially unveiling a major expansion of the Suz Canal the massive Public Works project will have a big impact on International Trade delivery delays and increased expenses are a result of the Red Sea houthi attacks and the drought in Panama a recent day saw a line of more than 50 ships waiting to pass through the Panama Canal including cargo ships carrying food and tankers transporting propane the operator of the canal has reduced the number of Crossings due to the prolonged drought which has extended weight times ships now pay tolls that are around eight times more expensive than they used to be container ships passing through Egypt’s Suez Canal are waiting for Naval escorts or skipping the route entirely in favor of a far longer cruise around South Africa more than 7,000 Mi distant ship owners are concerned that drone or missile assaults from a rebel group headquartered in Yemen could endanger their workers while traveling across the Red Sea global trade is being negatively impacted by both the geopolitical and climate-based issues in Suz and Panama respectively the volume of cargo passing via the Panama and Suz canals has decreased by over 33% several vessels have veered off course to take longer routes which has caused delivery delays increased Transportation expenses and economic demise for local communities around 18% of the world’s Commerce volumes passed through these waterways last year so ship operators are preparing for months of uncertainty in the 100 years that the man-made Waterway has been in use the Panama Canal is currently experiencing one of its driest periods beginning in the middle of 2023 officials are hoping that the drought will end in May when the dry season comes to an end in the Suez several ship owners have permanently halted operations due to strikes involving commercial ships further south since November more than 50 ships have been assaulted by huus such as a freighter carrying fertilizer that capsized and fell into the Red Sea as well as another that claimed three lives about onethird of the Hoy military assets have been destroyed by retaliatory strikes by a coalition led by the United States a pentagon official said Tim Hansen chief operations officer of Dorian LPG based in Stamford con which runs a fleet of 25 ships that move propane and butane said it’s the first time that both are disrupted simultaneously so you have to plan way in advance where to send your ship and you pay a hell of a lot more regardless in this regard having a viable alternative to both the Panama Canal and the Suez Canal will greatly improve global trade across Nations and so let’s explore a golden Waterway or a new trade route the arc IC route or the Northwest Northeast passage for ages explorers have been captivated by the old tale of the Northwest Passage a sea path that connects the Atlantic and Pacific Oceans and passes through the Canadian Arctic archipelago its discovery which led to it being dubbed the Arctic Grail promised a faster and more profitable trading route to East Asia but because of the dangerously cold conditions that made navigation difficult if not impossible it remained elusive with climate change’s effects becoming more apparent the Northwest Passage is now in an unprecedented position as a possible major Global Commerce route bringing with it both tremendous opportunities and new hazards so how viable is the Arctic shipping no worries because we are going to cover the future of the Northern sea route and possibly the total shutdown of the Panama Canal to global trade so just hang in there as we unravel all the details you need to know given a map and a pair of darts it would be hard to identify two locations that are more obviously distinct than Panama and the Arctic Ocean the global threat of climate change is drawing these two places however different they may be together as Commerce is diverted through shorter Arctic Roots the melting of the summer ice in the Arctic Ocean over the course of The Next Century May potentially signal the end of pan Panama’s largest economic engine the Panama Canal the magnitude of this threat raises three questions what are the benefits of shipping via the Arctic over the Panama Canal how is Panama handling the situation and is increased Arctic shipping a realistic possibility in order to address these issues let’s first compare and evaluate the benefits of shipping via the Panama Canal and the Arctic the picture that emerges is conflicting while the rise of Arctic shipping itself appears certain it is unclear how quickly and practically it could overrun the canal Panama’s media tends to focus on more pressing problems than melting Arctic Ice Panama’s Lifeline the present day nobe kuna and buir people’s indigenous ancestors lived on the Atlantic and Pacific coastlines of the narrow ismos that eventually evolved into Panama as early as 12,000 BC C the Panama Canal completed in 1914 bridged the distance between the world’s two largest Seas the canal has served as the Cornerstone of Panama’s diplomatic and economic Endeavors since it was taken over in 1999 under the authority of the Panama Canal Authority ACP about 40% of Panama’s economy is derived from the canal and the services it provides and as of today the Canal’s income has practically expanded five-fold since 1999 despite a decrease in overall transits from the previous year official data for 2019 set a new high with taxes on 4687 79276 PCS net tons yielding $2,592 billion USD after a much-needed upgrade was completed in 2016 the canal experienced rapid growth which the ACP celebrated as reug dura the Canal’s position as a hub for international trade up to 90% of the world’s crude oil and natural gas tankers are currently able to pass through the canal locks proving that the modernization project which focused on their expansion was a success how would the melting of Polar Ice significantly impact even a modernized Panama Canal given its expanding earnings and new technological achievements the Arctic passages convenience is key to the Panama Canal’s success since shorter routes translate into cheaper for shipping when the canal opened it completely changed global trade by enabling ships to travel directly between the Atlantic and Pacific Oceans so what happens if a seemingly free of charge even more convenient way opens up the Arctic Ocean is experiencing record rates of ice melting at the same time that the Panama Canal is generating annual income highs the Arctic Ocean still retains 5.08 million kilom of thinner late summer ice cover as of August 2020 although this area has lost 3.15 million kilom hours of late summer ice since 1979 or around 76,800 kilom hours annually in a short while the Northwest Passage a maritime route that touches Canada’s Arctic coast and offers the fastest path from East Asia to the east coast of North America might be free of ice and passible during the summer as an alternative to shipping via Suz its sibling passage the Northeast passage primarily follows the coast of Northern Russia between these two is the more challenging but direct transpolar route which might avoid many of the territorial navigational and depth problems of the Northwest Passage where its summer ice to vanish as scientists say it may by 2030 it is possible that thinner seasonal ice will replace the thicker multi-year ice that covered the Arctic in 1980 negating the need for ice breakers for shipping in the region the decision-making of Panama’s major Transit Partners may be significantly impacted by the possibility of a quicker toll-free transit route across the Arctic which would result in lower freight costs and carbon emissions Arctic shipping is it a trend or a fluke the threat posed by this alternative route to the Panama Canal Supremacy has been brought to light particularly in light of several high-profile transits through the Northwest Passage in the last 10 years in 2013 the ship Nordic Orion bypassed the Panama Canal and saved $200,000 and 4 days of sailing when sailing from Vancouver to Finland via the Northwest Passage and in 2017 The Finnish Icebreaker Nordica broke the record by traveling 10,000 kilm over a similar journey in just 24 days even while the overall impact of these individual ship TR transits is minimal they nevertheless establish a precedent that may soon signal much higher levels of traffic through the Arctic an upcoming Financial catastrophe things get much worse for Panama if we consider that the Northwest Passage would be the most convenient route for shipping between the US east coast and Asia according to official statistics as of 2019 180,000 164,000 PC M net tons out of 468,000 total tons that pass through the Panama Canal travel via the East Coast Asia route accounting for a startling 39% of all tonnage with a cargo flow of 38,6 40,000 PC or just 8% of total tonnage the route between the US east coast and the west coast of South America is the second busiest by origin and destination the United States alone accounts for no less than 66.4% of canal traffic with China coming in second maybe not surprisingly at 13.6% approximately 5% of all Marine shipping worldwide is made possible by the Panama Canal which is an outstanding statistic but one that is heavily reliant on trade between the US and China the East Coast Asia route is unquestionably the Cornerstone of Panama Canal traffic and if the US and China seize the opportunity for up to 30% shorter Journeys compared to taking the canal the losses in revenue for Panama could be staggering given the Unstoppable March of climate change and unprecedented ice melt in the north the question facing the Panama Canal in terms of future traffic loss is less if and more how much with the 2019 statistics serving as a baseline a cautious loss of 25% along the east coast Asia route alone would result in a decline in PCS tonnage of 45,1 141,000 or more than 7,000,000 PC less than the total for the next leading route a much more dire situation including 75% losses would result in a startling decline of 135,50 123,000 PC or a whopping 29% of total tonnage tariffs would also need to be ad adjusted in order to remain competitive with arctic Alternatives while the exact amount of fees varies depending on several factors larger container ships with 10,000 or more teu 20ft equivalent containers may have to pay up to $1,000,000 USD while older panamax vessels typically pay about $500,000 as a result Not only would Panama receive far less cargo through the canal but it would also receive less money for that cargo one would think that the issue would be prominent in public discourse given the possible severity of the threat that Panama could face if arctic ice melts at the current rate the many challenges of Arctic shipping although a shorter route free of tariffs seems very appealing at first glance it does not adequately convey the complexity cost and capricious nature of Maritime shipping in the Arctic season to season variations are possible in both the thickness and coverage of Arctic Ice building and Staffing ships that can endure Arctic temperatures is a costly and timec consuming task most damningly the idea that letting it melt is all that is required to turn the Arctic passageways into a viable alternative to the Panama Canal is undermined by the enormous amount of money required projections and management of sea ice the degree of accuracy of Arctic melting estimates is a serious debate it is important to note that fewer ships have been making the Northwest Passage than in previous years in 2019 27 ships made the passage compared to a peak of 31 in 2017 only five ships were able to successfully get through the thicker ice in 2018 due to the unfavorable weather and increased temperatures the Northwest passages accessibility is crucial because switching to the lengthy Northeast passage in the middle of the voyage would not save any time as compared to just crossing the Panama Canal in comparison the Panama Canal witnessed 962 transits in February 2019 the slowest month of the year out of a total of 12,281 transits the Arctic is warming but it hasn’t become defanged even though 2030 is a long way off ships will still have to deal with challenging circumstan es that are becoming more unpredictable due to climate change therefore only a small percentage of vessels now in service could probably pull off a similar accomplishment even though the Nordic Orion completed the Northwest Passage without assistance in 2013 Arctic standards for building and shipping whether Arctic routes are considered safe for non-specialist vessels in the shortest possible time will determine how immediate the threat is to the Panama Canal the international Maritime organization is currently working to ascertain this through the polar code which primarily requires various levels of Arctic Readiness for ships and sets restrictions on their ability to operate in Arctic seas these requirements include other fuel sources in addition to increased structural strength achieved by multiple hulls and bottoms due to its low cost heavy fuel oil is typical for maritime shipping yet attempts to Outlaw its usage in the Arctic have resulted in years of battle a limited restriction seems to be set to take effect in 2020 with the exception of vessels operating within National seas and carrying the flag of their own country the total number of cargo ships that are even eligible to cruise in the Arctic may be severely limited by these two conditions the idea of free passage in the Arctic loses appeal as it necessitates the use of more expensive fuel crew training and modern or modified vessels these problems don’t even begin to cover the expenses associated with converting the Arctic into a profitable and secure shipping route future shipping in the area will probably need to rely on ice breakers to some extent because Arctic Ice is so tough and unpredictable even as it melts but the last 10 years have shown just how challenging it can be to collect and manage a fleet of modern ice breakers all countries that operate in the Arctic face this challenge but Russia’s story is particularly beneficial since despite their extensive experience sailing the Arctic their ambitious nuclear-powered LK 6A Series has encountered countless Technical and financial problems lastly the arctic’s remoteness and the challenges of development present the last and maybe biggest barrier to an Arctic takeover of the Panama Canal’s dominance and that ends today’s episode what do you think of the Arctic shipping route do you think there are ways to overcome the already known challenges if in case there is continuous drought in the Panama Canal let us know your thoughts in the comment box below we sincerely hope you enjoyed the video see you next time

Delivery delays and increased expenses are a result of the Red Sea Houthi attacks and the drought in Panama. A recent day saw a line of more than fifty ships waiting to pass through the Panama Canal, including cargo ships carrying food and tankers transporting propane. The operator of the canal has reduced the number of crossings due to the prolonged drought, which has extended wait times. Ships now pay tolls that are around eight times more expensive than they used to be.
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