The Panama Canal: A Challenge to Efficiency in the 21st Century Intertanko Chemical Conference April 8, 2008 Silvia de Marucci Leader, Liquid Bulk Segment smarucci@pancanal.com
Physical Profile of the Canal Transition Process Main Aspects of our Trade and Market Trends Products Routes Traffic Content Modernization Plans Long Term View
ATLANTIC OCEAN CHAGRES RIVER GRANDE RIVER PACIFIC OCEAN
ATLANTIC OCEAN GATUN LAKE CHAGRES RIVER GRANDE RIVER PACIFIC OCEAN
ATLANTIC OCEAN COLON CITY GATUN LOCKS GATUN LAKE MADDEN MIRAFLORES LOCKS PEDRO MIGUEL LOCKS PANAMA CITY CHAGRES RIVER PACIFIC OCEAN
Canal s Physical Profile
Dimensions of Panamax Locks LENGTH OF LOCK: 304.8 m (1,000 ft) MAXIMUM LOA: 294 m (965 ft) MAXIMUM DRAFT: 12 m (39.5 ft) LOCK WIDTH: 33.52 m (110 ft) MAXIMUM BEAM: 32.5 m (106 ft)
Physical Profile of the Canal Transition Process Main Aspects of our Trade and Market Trends Products Routes Traffic Content Modernization Plans Long Term View
And It Was a Party...
Main Differences Between the Business Model of the Panama Canal United States Administrated by its main client Break even operation Strategic military importance Panama Administrated by a non client Profitable and competitive Responsible for water resources Strategic economic importance and part of the national maritime strategy
Responsibility for the Administration and Preservation to the Hydrographic Basin
ISPS CODE COMPLIANCE The Panama Canal adopted the International Ship and Port Facility Security Code (ISPS) on July 1st, 2004 Vessels on international voyage must notify at least 96 hours prior to its arrival to the Canal: Intention of proceeding to anchorage, to port, or to transit Security level at which the vessel is operating Security level at which vessel operated in the previous 10 calls at port facilities. Valid ISSC
Environment Around the Canal Galeta Point Sherman Soberania National Park Gatun Locks Escobal Pedro Miguel Locks Miraflores Locks Cuipo Lagarterita Arenosa Barro Colorado National Monument
Panama Canal Shipboard Oil Pollution Emergency Plan Vessels over 400 tons of oil are required to submit a plan It indicates: Specific prevention measures Spill reaction and notification procedures Training program Designation of an Authorized Person Tier classification: transit fee
Oil Spill Program: PCSOPEP Planning Standards
Tier 1, 2 & 3 Exercise: MOBEX 2007 MOBEX DIC-2007
Physical Profile of the Canal Transition Process Main Aspects of our Trade and Market Trends Products Routes Traffic Content Modernization Plans Long Term View
Main Commodities that Transit the Panama Canal Fiscal Year 2007 Containerized Cargo Grains Petroleum and Products Metals and Ores Chemicals and Petrochem. General Cargo Iron/Steel Manuf. Products Coal Nitrates and Phosphates Wood and Products Canned/Refrigerated Prod. Machinery and Equipment Minerals Other Agricultural Products Animal/Vegetable Oils/Fats Misc. Dangerous Goods 0.5 2.3 2.1 5.1 5.1 4.8 4.1 6.2 5.7 7.2 14.7 13.4 13.0 33.0 32.1 58.6 0 10 20 30 40 50 60 70 Long Tons in millions
Main Routes - FY 2007 Total (Long Tons) 208.2 M East Coast U.S. Asia 82.4 M West Coast South America East Coast U.S. 20.2 M West Coast South America - Europe 15.1 M West Coast Central America East Coast U.S. 10.6 M West Coast U.S. - Europe 8.2 M
90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 100% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Canal Market Share for Cargo Flows Between the Northeast of Asia and the East Coast of U.S. Sistema Intermodal EU 85.7% 82.8% 77.2% 71.8% 64.6% 60.9% 58.12% 1999 2000 2001 2002 2003 2004 2005 11.3% 15.1% Canal de Panamá 20.8% 23.6% 33.8% 38.2% 40.12% 1999 2000 2001 2002 2003 2004 2005 Fuente: Estimado basado en diferentes fuentes de la industria (PIERS, AAR, Banco de Datos Corporativo de la ACP) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 3.0% 2.1% 2.0% Canal de Suez 4.6% 1.5% 0.93% 1.75% 1999 2000 2001 2002 2003 2004 2005
PC/UMS by Market Segment (in million - FY 1995-2007) 160 150 140 130 120 110 100 90 80 Containerships Dry Bulk Liquid Bulk General Cargo Reefers Passengers Vehicle Carriers Others 70 60 50 40 30 20 10 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
4000 Growth of Container Traffic through the Panama Canal (1997-2007) 16 3500 3000 Transits (1,302-3,622) Capacity TEU (2.5M-13.8M) 14 12 No. of Transits 2500 2000 1500 1000 10 8 6 4 Millions of TEUs 500 2 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Based on the capacity of transiting vessels Source: CompairData
Transits PC/UMS Tonnage in Millions 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Transits vs. PC/UMS Tonnage FY1915 FY2007 PC/UMS Tonnage of Commercial Transits 312.2 PC/UMS 4,832 9,931 18,940 23,591 AF 1955 AF 1975 AF 1995 AF 2007 14,721 Transits 1915 1917 1919 1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Fiscal Year 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0
Requirements by Vessel Type and Size < 80 BEAM Gatun Lockage in One Hour Requires 4 Locomotives Assisted by 3 Tugs 1 Pilot No Transit Restriction PANAMAX Gatun Lockage in 2 Hours Requires 6-8 Locomotives Assisted by 7-10 Tugs 2-3 Pilots Daylight one-way traffic through Gaillard Cut, and daylight transit through the locks for vessels 900 LOA
Physical Profile of the Canal Transition Process Main Aspects of our Trade and Market Trends Products Routes Traffic Content Modernization Plans Long Term View
CAPITAL INVESTMENT (in million U.S. dollars) 1,329 Dredging 119 Locomotives 2000 2001 2002 2003 2004 2005 2006 2007 Hydraulic Conversion Technology Track system Tug Boats
Renewal of tugs fleet Renewal of locomotives fleet Rehabilitation of Locomotive Rails Replacement of turntables at Gatun Locks
Replacement of valve machinery for a hydraulic system Improvement in the lightning at the locks Tie up stations at Cartagena hill
Maximum Capacity of the Improved Canal Demand that will not be captured due to lack of capacity
Physical Profile of the Canal Transition Process Main Aspects of our Trade and Market Trends Products Routes Traffic Content Modernization Plans Long Term View
Canal Expansion Program Deepening and Widening of the Atlantic Entrance Atlantic Post Panamax Locks Complex Widening of Channel Reaches and Turns at Gatun Lake Access Channel to the Pacific Post Panamax Locks Pacific Post Panamax Locks Complex Deepening and Widening of the Pacific Entrance
Program Components Post-panamax Locks Pacific and Atlantic Locks (29.66 M m 3 Dry Excavation) 1 Contract
New Locks Dimensions 294.1m (965 ) Actual Locks Vessel Max: 4,400 33.5m (110 ) TEUs Draft 12.04 m (39.5 ) 32.3m (106 ) 12.8m (42 ) 304.8m (1000 ) 49m (160 ) 366m (1200 ) 55m (180 ) 427m (1400 ) 18.3m (60 ) Draft 15.2 m (50 ) New Locks Vessel Max : 12,600 TEUs
Post Panamax Locks Operation WSB 1 WSB 2 WSB 3 With the water saving basins the new locks will use 7% less water than the existing locks Water Utilization New Locks Existing Locks
Post-Panamax Lock on Pacific Side
Post-Panamax Lock on Atlantic Side
Conceptual Design
Expansion works began on September 3, 2007
Beginning of the Works for the Expansion of the Canal Volume: 7.4 Mm3
Schedule of Main Projects Activity EIS Expansion Program (Category III) % Progress 78% 06 2007 2008 2009 2010 2011 2012 2013 2014 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Dredging Access Channel Locks Specifications and Procurement 30% Design & Build Pacific Locks 0% Design & Build Atlantic Locks 0% Excavation Contract 1 13% Excavation Contract 2 8% Excavation Contract 3 0% Excavation Contract 4 0% Excavation Contract 5 0% Dredging of the Pacific Entrance 8% Dredging of Gatún Lake 5% Dredging of Culebra Cut 3% Dredging of the Atlantic Entrance 0% Increase Operating Level of Gatún Lake 0% Expanded Canal Begins Operations Specifications and Design Bidding and Contracting Execution Finish
Cluster of Canal Traffic Service Related Activities
Main Logistics Hubs ROTTERDAM SHANGHAI SHENZHEN BUSAN HONG KONG LA/LB NY/NJ HAMPTON RDS. SAVANNAH FREEPORT KINGSTON ALGECIRAS HAMBURG DUBAI PANAMA SINGAPORE
Main Logistics Hubs ROTTERDAM SHANGHAI SHENZHEN BUSAN HONG KONG LA/LB NY/NJ HAMPTON RDS. SAVANNAH FREEPORT KINGSTON ALGECIRAS HAMBURG DUBAI PANAMA SINGAPORE
THANK YOU! smarucci@pancanal.com