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First big containerships en route to the Panama Canal (theloadstar.co.uk)
86 points by protomyth on June 15, 2016 | hide | past | web | favorite | 45 comments

For anybody interested in geopolitics: the new canal is big enough for Nimitz and Ford class carriers. Cutting travel time from NY to LA from 17 days to 7 days.

NY to Taiwan strait is now only ~14 days, previously ~20 days and LA Taiwan strait remains ~8 days. LA - Israel travel times from 18 days to 11, from NY about 7 days.

This has relatively little to do with "power projection" as carrier battle group is lot more likely to use the Suez canal in such situations. But for U.S. defense this is significant. Now nobody can start crossing the pacific with evil thoughts without taking into account every carrier battle group in Pacific and Atlantic. And if you embark from Barents sea, you have to take into account anything floating around Hawaii or closer.

Is it easy to sabotage the canal while the battle groups are traversing it, effectively trapping them inside? Would they take that risk?

The alternative is not that much better, Drake passage at the tip of south America is stormy and "only" 1000km across and very stormy. This makes it very difficult for carrier to safely operate aircraft. Which makes it difficult to out range threats. So they pass though stairs of Magellan. Which in turn makes surprise attack with container missile more of a threat. You could fire it from container parked at Punta Arenas. http://thumbs.dreamstime.com/z/club-k-container-missile-syst...

Here is Nimitz at suez channel: http://web.mst.edu/~rogersda/military_service/Carrier%20in%2... and here in Magellan strait: https://commons.wikimedia.org/wiki/File:US_Navy_040621-N-653...

Edit: added the word "stormy". Drake passage is mean business.https://cnet4.cbsistatic.com/hub/i/r/2008/03/04/e9944d14-f4d...

Do the really go through the straits of Magellan that often? They did it for the first time only in 2004. http://www.navy.mil/submit/display.asp?story_id=13939

Interesting, thanks.

But while the carriers are sailing through the canal, aren't they sitting ducks for just about everything?

DoD is not to actually going to do it often. It's preferable to have carriers based on both sides of continent anyhow.

In defense in general, it's often lot more important to have capabilities and possibilities. Those alone can act as deterrence or threat. Which is often enough to gain the underlying political goal.

In naval defensive context, the doctrine is historically called "fleet in being".


Some context (2014) http://www.mckinsey.com/business-functions/strategy-and-corp...

The industry’s bleak economics

Transport is often seen as the harbinger of the broader economy. It certainly fulfilled that role in the recent economic crisis, as business fell off precipitously. However, shipping is now also a kind of lagging indicator: its performance is trailing the broader, somewhat erratic global recovery.

A big part of the problem is that the industry continues to add capacity. By 2015, the typical vessel delivered will handle about 10,000 20-foot equivalent units (TEU), five times more than ships built in the 1990s. Not surprisingly, pressure to fill this capacity and capture the efficiency benefits of larger vessels has led to hasty decisions by carriers. In turn, profits have become exceptionally volatile. Record losses in 2009 were followed by strong profits in 2010―and significant losses again in 2011.

The supply/demand imbalance, the larger vessels that will only make the imbalance worse, and the volatility of profits are significant problems. However we argue that they are in fact symptoms of these deeper challenges:

The market is saturated, and the industry is now in a race for market share. The quest to take share is squeezing out smaller players and has started another wave of price wars. Shipping companies are forsaking their guidelines on pricing, both in spot rates and general rate increases, and choosing not to enforce contracts with customers.

Companies are pricing at their marginal cost. That’s not necessarily bad; in fact, it’s the right decision for many. But for others it is irrational, and when everyone does it, the industry suffers. Many shipping companies have ineffective cost-management systems.

I used to work at a major container carrier and they actually had a pretty good handle on their operating costs (it's not hard when you only sell one thing), their problem was insane capital expenditures. When China joined the WTO in 2002 they bet big on the upward trend in demand continuing indefinitely, and when the economy crashed in 2008 they were left with a huge order book of new vessels they no longer needed. They still haven't recovered from that.

I thought this was more interesting, using miniature models such as tiny ships for training


There's a site in France which specializes in this kind of training: https://en.wikipedia.org/wiki/Port_Revel

John McPhee wrote a super-awesome journalistic piece based on a visit to Port Revel (called "The Ships of Port Revel"). It's published in his book Uncommon Carriers (which is about profiles of people who work in different parts of the transportation industry).

Depending on your country, you may be able to read the whole thing on Google Books via this link from Danielle Sucher:


I want to ride that adorable little boat around all day.

The temptation to say "Toot toot!" and giggle like and idiot would be very strong.

It would be great for stag groups

Am I reading this right. I could HIRE a container ship for $5500 a day? A whole ship! Does not seem right to me, crew costs would have to be more than that.

> Indeed, according to Alphaliner, there are about 40 panamax container vessels currently seeking employment on the spot market against an unfavourable backdrop of oversupply. It said that charter rates remained “stuck at rock-bottom levels” – typically at about just $5,000-$5,500 a day

Calling Peter Thiel, if there's about to be a glut of unwanted "old Panamax" container ships on the market for charter, maybe some will be for sale? Buy a few, strap them together and put them 13 miles off the coast of SF. What can possibly go wrong?

13 miles off the coast of SF. What can possibly go wrong?

13mi offshore? What can go wrong is you're still in US territorial waters; they end ~4,200 feet further out, because territorial waters are defined in nautical miles.

But even if you amend to "13 nautical miles off the coast", you run into "Hi, you're still in our exclusive economic zone." To get out of that and truly be free of both territorial and economic-exploitation claims of existing states, you need to be more than 200nm from any coast. Which is ~230mi and a bit more of a hassle to commute to, supply, etc., not to mention you'd need to build a stable anchorage for them and all the natural ones are, well, within the territorial waters or exclusive economic zones of existing states.

I believe it was a reference to Neil Stephenson's novel "Snow Crash".

Peter Thiel's probably too busy speaking at white nationalist conferences.

I have a feeling those are BYOC - bring your own crew.

Still, it's got to beat those stupid luxury yachts.

even docked in a harbor, it would be a great novelty corporate event location. And cheaper than many other options.

Though I assume docking fees would be above the $5500 a day.

You'd anchor out in the basin and ferry to it on a pilot boat or tug.

Minus all the fancy amenities

I dunno, I can fit a lot of amenities in 5,000 teu...

in a lot of individual 20 or 40 ft long amenities, as long as your amenities are not wider than 8' and 9.5 ft high.

Yes, but then you need to buy ~200 metric tons of fuel per day (@ $500/MT), pay port and canal charges ($350,000 each way for a PanaMax), etc.

I understood about 1/2 the phrases in this article. Can someone who is familiar with shipping terms tell me what Panamax strings are?

A string is just a multi-hop service/route, like Hong Kong -> Panama -> New York -> Norfolk -> Savannah -> Panama -> Hong Kong. Somewhat like a 'flight' for airlines.

From 'Dictionary of Shipping Terms' by Peter Brodie [1]:


> Service offered by a shipping line involving several vessels performing outward and return voyages between ports in two distinct geographic or commercial areas. Also referred to as a 'service string' or 'string of vessels'

[1] https://books.google.com/books?id=sRqk-NfgEY0C

Just a nit, but extremely unlikely they would stop in 2 US ports due to Jones act:

"requires that all goods transported by water between U.S. ports be carried on U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents."

Not a lot of those so US port to port is run a bit different. Basically Hawaii and Alaska.

The rules can be satisfied so long as you're careful. Airlines do this routinely; Qantas, for example, flies New York (JFK) to Sydney, with a stop in Los Angeles. But you can only buy the ticket New York-Sydney or LA-Sydney, not New York-LA, and this is why. So long as anything or anyone you deliver originated at a port outside the US, or you only ever pick up at ports in the US and never drop off, you're on the right side of the cabotage rules.

That sounds like a giant waste. There must be many empty seats New York-LA, at least one for each passenger flying LA-Sydney.

Qantas can't do much about this at the moment. Their current widebody fleet consists of:

* Airbus A330-200, maximum range 8,360mi.

* Airbus A330-300, maximum range 7,300mi.

* Airbus A380-800, maximum range 9,400mi.

* Boeing 747-400, maximum range 8,350mi.

* Boeing 747-400ER, maximum range 8,820mi.

But the great-circle distance JFK-SYD is 9,950mi. It was only recently that they were able to start DFW-SYD as a nonstop with the A380; the 747s used previously had to make a stop in Brisbane. And once it went nonstop, it was the longest regularly-scheduled commercial airline flight in the world until March of this year, when Emirates began flying nonstop from Dubai to Auckland.

Currently, Qantas is said to be evaluating the next-generation 777 variants for possible nonstop service to and from New York, but until then they'll have to make a stop somewhere. They have the same issue in the other direction, too: they partner with Emirates so they can use Dubai as a halfway point for their flights to and from Europe.

But they do, and some specifically offer US flag vessels on certain routes. However, like you said, the Jones Act only applies to US-to-US shipments, whereas most cargo is coming and going from overseas -- so it's typically a non-issue.

Here's some actual schedules showing real routes calling at multiple US ports:

[1] http://www.cosco-usa.com/fpdb/Services/schedules.aspx [2] PDF: http://www.hamburgsud-line.com/hsdg/media/hamburgsd/document... [3] PDF: https://www.msc.com/getattachment/dfebb208-935e-4060-b0c7-a5...

used to work for a container shipper, there is absolutely zero intra-US transportation via container vessels. The multiple US port calls in a string such as NY - NFK - SAV are discharge - discharge - load or something of the variant. its not picking up containers at NY and discharging same containers in SAV.

besides, I can't think of any use-cases where container shipping within US would be sensible. US company supply chains aren't designed in a way where procurement activities are dispersed and could benefit from intra-US container shipping. unless someone can think of a company?

another note: IIRC theres a lot of traffic that discharges at LA and rails to HOU. even with the expanded canal, this is the most cost efficient way to get cargo from asia to houston. trans-pacific vessels are > 10k TEU so if a supplier wanted to go through panama canal, you'd have to use smaller trans-pacific vessel which would raise shippers unit cost thus raising the suppliers cost. if you're a company that relies heavily on asian imports, your facilities are typically located on the west coast to avoid extra transportation cost anyway.

i don't think this news is that impactful

so it's typically a non-issue— unless you live in Puerto Rico.


Panamax ships are the absolute maximum size of ship the Panama Canal can handle (eg: PANAma canal MAXimum). [0]

Edit: Obviously, the canal is now larger. So Panamax in this case refers to ships that maxed out the old maximum size.

[0]: https://en.wikipedia.org/wiki/Panamax

And they really mean "absolute max". See these pictures of Panamax ships being carefully squeezed through the locks.[1]

The original two lock lanes were built in 1917, and they were built big for the time. But bigger ships are now available and won't fit. So the Panama Canal Authority just finished a third lock lane, with longer, wider, and deeper locks, for larger ships.[2] There were problems with the new construction, including serious leaks in the concrete. But the new locks open for business in 10 days.

Here's good drone imagery of the new locks being used by a ship for the first test run.[3]

If you're really into this, here's a video of the basic operational procedures for using the new locks.[4] A maximum sized, fully loaded container ship pays about $1M in tolls for each transit. That's about $85 per container. There's a loyalty program for regular customers, with discounts.

[1] http://www.canalmuseum.com/canalphotos/panamax.htm [2] http://micanaldepanama.com/expansion/ [3] https://www.youtube.com/watch?v=xA2TyFxbH9Q [4] https://www.youtube.com/watch?v=DrQrKAku3e0

One of the other things the new locks do is try to save water. The lake at the center of Panama is at a higher elevation than the ocean on either side - each time the locks are cycled water flows from the lake to the oceans.

The water in the lake is only refilled during Panama's rainy season, and drought conditions in recent years have on occasion made it necessary to put restrictions on the ships transiting the system.[1]

Those huge basins next to the new locks in the video are a water cycling system. They aim to capture a significant percentage of the water as they cycle the locks and then re-use it, rather than just draining the lakes.

[1] http://www.channelnewsasia.com/news/business/panama-canal-re...

One thing that baffles me is the fact that ok, the third lane is bigger; but it's one lane vs the existing two. If everyone started using only New Panamax ships, they would effectively cut in half the number of ships that can go through (and would likely have congestion issues because of alternating directions of travel). Just to balance that, new ships should have 100% more capacity, but spec numbers look 50% bigger at best.

Is there a plan to enlarge at least one of the existing lanes, once the new lane is open?

That was a great video, really awesome scale of engineering here.

I love how it refers to the "high mast lighting" [1] as "high mast lightNing" in both the speech and on-screen text.

I guess they're not all native speakers (neither am I, to be clear). It's kind of a "honey pot" in English that I somehow tend to be sensitive to. :)

[1] http://s-steel.com/3755-2/

I'm confused. The article implies that 'westbound' ships are headed the opposite direction of ships headed for New York. But ships traverse the Panama Canal from east to west on the way from Asia to New York.

Is there a convention of calling ships that cross Panama from southeast to northwest 'eastbound' and ships that traverse from northwest to southeast 'westbound?' Because that seems like it would be even more confusing that things already are.

They're referring to global (i.e. shipping) geography with regard to east-west, not local geography.

The convention is actually to call the Atlantic side 'north' and the Pacific side 'south'.

Because it is actually 'north' and 'south'. Somewhat unexpectedly, the Atlantic exit of the canal is actually west of the Pacific exit.

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