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Maersk to Send Boxes Overland to Avoid Panama Canal Delays

Maersk containers
Maersk will be using a "land bridge" instead of sending ships through the Panama Canal (Panama Canal Railroad)

Published Jan 10, 2024 7:47 PM by The Maritime Executive

 

Maersk is taking steps to elevate some of the choke points in its ocean routes reporting today to customers that it will begin providing a novel approach for one niche route as an alternative to avoid potential delays at the Panama Canal. They are seeking to provide shippers consistency while dealing with the disruptions coming from the reduced number of transits at the Panama Canal while the carrier also had decided to reroute vessels around South Africa for the foreseeable future which is also putting strains on the network.

“Reflecting on the ongoing water situation in the Panama Canal, and the possible impacts on cargo movements, we wanted to inform you on changes to services, as well as what Maersk is doing to mitigate the situation,” the carrier writes in a customer advisory issued today, January 10. “To ensure that your cargo continues to move with as few delays as possible, we are amending our OC1 service, operating between Oceania and the Americas.”

Maersk reports for this route, vessels that utilized the Panama Canal before will now omit the Panama Canal and use a “land bridge” that utilizes rail to transport cargo the approximately 50 miles across the isthmus. The Panama Canal has been requiring some vessels to send containers across by land to reduce weight and draft, but now despite the Panama Canal Authority reporting it was delayed further planned reduction in the number of daily transits, Maersk is creating a unique two-ship solution for this route.

The service connects ports in Australia and New Zealand with Charleston and Philadelphia in the United States. It is a niche route served by small ships with a capacity of approximately 3,000 to 4,000 TEU, but because of the distance, it is a long route scheduled for 45 days northbound from Sydney, Australia, to Charleston and 38 days southbound between Philadelphia and Melbourne.

Explaining the new land-bridge route, Maersk writes, “this creates two separate loops, one Atlantic and one Pacific. Pacific vessels will turn at Balboa, Panama, dropping off cargo heading for Latin America and North America and picking up cargo heading for Australia and New Zealand. Atlantic vessels will turn at Manzanillo, Panama, dropping off cargo heading for Australia and New Zealand and picking up cargo heading for Latin and North America.”

They are warning that while no delays are expected for the northbound service, shippers might experience some delays for boxes on the southbound route. However, they believe it will provide better consistency while reducing the number of vessels trying to transit the Panama Canal freeing slots for likely larger ships in primary routes.

It is a novel approach to addressing some of the delays at the Panama Canal. Today the Panama Canal reports there are 40 booked vessels and 20 without reservations waiting for transit at both terminuses. The wait time for vessels without reservations is between approximately 9 and 10 days.

Maersk is also looking to potentially expand the use of the land bridge route. They report they will look to connect shipments from the Gulf of Mexico to the two-loop solution on the OC1 route in a similar fashion to the current runs between Oceania and Asia on the route.

The revised route is one of several steps Maersk is taking to address challenges in its network. Alphaliner reports that the carrier has also taken the unusual step of chartering vessels two newly built vessels from rival carriers Ocean Network Express and Wan Hai. The newly built ONE Focus (15,000 TEU) is owned by Seaspan and was part of a long-term agreement with ONE, while the Wan Hai A12, also newly built, has a capacity of 13,100 TEU. Alphaliner reports Maersk is using the two vessels to elevate some of the pressures on its routes between the Far East and the U.S. West Coast.

These steps demonstrate the moves carriers are implementing to address the disruptions emerging along their networks.