‘This is going to get worse before it gets better’: Panama Canal pileup due to drought reaches 154 vessels
A ship navigates through the Panama Canal in the area near the Americas’ Bridge in Panama City on April 24, 2023. The scarcity of rainfall due has forced the Panama Canal to reduce the draft of ships passing through the interoceanic waterway, in the midst of a water supply crisis that threatens the future of this maritime route.
Luis Acosta | Afp | Getty Images
The number of vessels waiting to cross the Panama Canal has reached 154, and slots for carriers to book passage are being reduced in an effort to manage congestion caused by ongoing drought conditions that have roiled the major shipping gateway since the spring. The current wait time to cross the canal is now around 21 days.
The Panama Canal is a critical trade link for U.S. shippers heading to Gulf and East Coast ports. The U.S. is the largest user of the Panama Canal, with total U.S. commodity export and import containers representing about 73% of Panama Canal traffic. Forty percent of all U.S. container traffic travels through the canal every year, about $270 billion in cargo.
The massive pileup is a result of water conservation measures the Panama Canal Authority deployed in late July due to drought. The PCA has temporarily lowered the availability of booking slots from August 8-August 21 for Panamax vessels, which are the largest vessels that can cross the canal. These vessels can carry 4,500 twenty-foot equivalent units (TEUs). The number of pre-booking slots was reduced to 14 daily from 23.
Satellite photos from Planet Labs detail the congestion.
Vessels waiting to cross Panama Canal from Pacific Ocean side. Red square indicates Panama Canal
‘Planet Labs PBC’
Additional lower water level restrictions imposed by the PCA in July also require vessels to be 40% lighter, impacting vessels that were in transit when the requirements were implemented. The Ever Max was forced to unload 1,400 containers at the Port of Balboa in order to meet the requirements and gain passage. The vessel is currently anchored at the Port of Savannah.
“Those containers left may need another vessel to complete the journey,” said Captain Adil Ashiq, head of North America for MarineTraffic. “This is going to get worse before it gets better,” he said.
A canal lock loses 50 million gallons of water when a single vessel traverses the canal. Water levels in Gatun Lake, which feeds the canal, are at a four-year low.
Ricaurte Vásquez Morales, administrator of the Panama Canal, said that considering the changing circumstances, the canal is maintaining an open line of communication to keep customers informed about booking slot availability. “Through regular updates, transparent dialogue, and close collaboration with shipping lines and stakeholders, we strive to manage expectations and provide real-time information that enables our customers to make informed decisions,” he said.
Ashiq explained that vessels have to wait longer to transit the canal or ocean carriers make a business decision to take alternative routes, which add time and fuel costs to the journey. Shippers using multiple vessels to move their freight adds to freight costs, and longer lead times to secure bookings. Ultimately, he said, these costs may end up being passed down to businesses and consumers.
Recent data released by supply chain intelligence firm Descartes shows the East Coast ports continue to be the preference for U.S. shippers. West Coast ports saw a decrease of 38.3% in July trade, and top East and Gulf Coast ports processed an increase of 46.4%.
“Now is not the time to further stress supply chains that are still straining under ongoing logistical pressures,” said Stephen Lamar, president and CEO of the American Apparel & Footwear Association. He said surcharges and vessel restrictions will likely mean higher clothing and shoe prices for U.S. consumers this holiday season.
This latest reduction in bookings is on the heels of the PCA reducing the number of vessels allowed to go through the canal in a day. Starting on July 30, 2023, the daily transit capacity of the Panama Canal was adjusted to an average of 32 vessels per day (10 vessels in the newer Neopanamax locks, which serve the larger vessels, and 22 vessels in the older Panamax locks). Before the water conservation measures, transits were 34 to 36 a day.
Alan Baer, CEO of logistics company OL USA, told CNBC that shippers may have to start looking at other routes.
“With the increasing difficulty of reaching the U.S. East Coast via the Panama Canal, importers may be looking at vessels transiting the Suez,” Baer said. He added that this can be an effective solution for freight originating in the ASEAN region and some Southern China origins. However, for Northern China and North Asia, deviation via the Suez can add seven to 14 days of additional transit time.
Energy sector diversions are already happening
Diversions are already happening in the energy sector. The mounting delays have clean tankers, which carry refined petroleum products, avoiding the canal, shifting their preference to book routes to the Atlantic Basin, according to S&P Global. Data from its Commodities at Sea unit shows that in the combined June to July period, U.S. Gulf Coast clean petroleum product exports using the canal and traveling to the West Coast of South America slowed by 82% year over year. Exports in July, specifically, were down 12% year over year.
Cheniere Energy announced in July that it would avoid the Panama Canal to ship LNG because of the wait times. The canal is the quickest route for the LNG market to reach Asia. Coal traffic is also being impacted and making adjustments. India is a big importer of U.S. coal and vessels carrying the commodity also use the Panama Canal.
Volvo Penta will debut its latest modular and scalable battery energy storage system (BESS) platform for the off-grid construction and mining industries at the bauma equipment show – here’s what you can expect.
Best-known for its marine engines and gensets, Volvo Penta is the power production arm of the Volvo Group, specializing in putting energy to work. Operating under the tagline, ‘Made to Move You’, Volvo Penta is headed to bauma 2025 with a plan to keep construction, port shipping, and mining operations moving productively and competitively throughout their transitions to battery and (in theory, at least) hydrogen power.
To that end, the company will show off a job site ready version of the scalable and modular BESS subsystem concept shown last year.
Volvo says its new, modular BESS subsystem will enable other OEMs and third party system integrators to seamlessly deploy electric power to meet the ever-exceeding energy needs in construction and mining.
“Our modular and scalable battery-electric platform is designed to support the electrification ecosystem—combining high-performance drivelines with the crucial energy storage subsystems for efficient charging and operation in construction and mining,” says Hannes Norrgren, President of Volvo Penta Industrial. “We want to meaningfully collaborate with our customers on value-added customization that will enable them to stay productive, efficient, and future-ready.”
The Penta substation at bauma will be built around the company’s “Cube” battery pack, an energy-dense solution with a favorable C-rate designed to make it easy for BESS manufacturers to offer more compact job site solutions capable of charging and discharging energy with high levels of speed and efficiency, enabling both stationary and mobile BESS configurations that can change and grow to meet the evolving needs of a given asset fleet or project.
A Volvo Penta-developed DC/DC unit converts the voltage from the Cube battery packs (600 V) into lower voltage (24 V) for powering auxiliaries and portable offices.
Electrek’s Take
Volvo Penta has always provided power. Historically that’s been from combustion, but the company is looking ahead, developing products that will bring energy to job sites, tractors, and more long after the last ICE engine shuts down.
SOURCE | IMAGES: Volvo Penta.
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Just days after Rivian announced that it would be making its iconic electric delivery vans available to anyone willing to pay for one, the company launched the new Rivian Upfit Program, offering a “one-stop shop” to help fleet managers put its EVs to work.
Launched in partnership with commercial vehicle heavyweights Ranger Design, Sortimo of North America, Bush Specialty Vehicles, Holman, LEGEND, and EV Sportline, the Rivian Upfit Program helps fleet buyers make the switch to electric by simplifying the ordering process and delivering an experience that more closely reflects the experience fleet managers get at dealerships.
Despite partnering with leading brands and launching into a well-establish market, however, the program’s web page seems largely aimed at people outside the space – even kicking off with an explanation of what upfitting is:
Upfitting is the process of customizing a vehicle in order to meet fleet, business, or individual consumer needs to tackle the job at hand. This work is done after the vehicle has been built and released from the factory, and can include everything from shelving modifications, flooring options, to sirens and flashers and much more.
The program was announced on LinkedIn with a number of photos indicating upfit options for Rivian’s R1T and R1S vehicles focused on lifeguard and roadside assistance duty, and Rivian’s van upfit with a HVAC/telecom style toolbox arrangement.
No word on pricing or turnaround time.
Electrek’s Take
The general consensus around the Electrek water cooler is that the direct-to-consumer model offered by Rivian, Tesla, and even CarMax deliver a superior customer experience, I’ve consistently drunk the franchise dealer Kool-Aid, arguing that the industry-leading margins enjoyed by these companies actually indicate they’re giving consumers an objectively worse deal than they’d get in a more competitive dealer landscape.
That same competitiveness has led to talented fleet managers at those franchise dealers putting in the effort to get to know the needs of the businesses and buyers in their regions, to understand what upfit options makes sense for their local markets, and – crucially – what to stock for quick turnaround when their customers need it.
Rivian is hoping its upfit partners will do a lot of that heavy lifting for them, but my two cents is that if building cars is hard, building relationships is harder, and Rivian isn’t going to make a good first impression by talking down to its customers. If you think differently, let me know how I got it wrong in the comments.
SOURCE | IMAGES: Rivian, via LinkedIn.
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For 2025, the Ram ProMaster EV commercial van gets up to 180 miles range from its 110 kWh battery pack, new 12- and 13-foot cargo configurations to meet more fleets’ needs, and a starting price of “just” $56,495. All of which sounds … kind of familiar, right?
When Ram rolled out its ProMaster EV electric cargo van last year, the company promised a huge range of customizable features, 12- and 13- configurations, a “super high roof” variant, and more – even touting a heated windshield. Which is almost exactly what you’ll find hyped up in the latest Stellantis press release for the “All-new 2025 Ram ProMaster EV Cargo Van.”
So, if it’s basically the same van, what’s the story here?
Glad you asked – see, the 2024 announcement for the ProMaster EV made lots of promises, but anecdotal conversations revealed that the vast majority of ProMaster EVs that made it customers last year were the step van version, with its “pocket” side door and roll-up rear door.
That makes sense, considering that’s how Stellantis’ prime customers for the Ram ProMaster EV, Merchants Fleet …
The Ram Truck brand has announced that Merchants Fleet will become a key commercial customer of the all-new Ram ProMaster electric van (EV) that debuts later this year. The agreement calls for the purchase of 12,500 Ram ProMaster EVs.
STELLANTIS; JUN2023.
… and Amazon …
Stellantis, with input from Amazon, designed the vehicle with unique last mile delivery features and Amazon will deploy the vehicles to routes across the United States. Building on the current relationship and as part of the long-term agreement, Stellantis and Amazon will be putting thousands of BEV ProMasters on the road every year.
STELLANTIS; JAN2022.
Spec’ed them out.
Co-developed with Amazon
The story here, then, is that the conventional cargo variants (sliding van door, split-opening rear doors, etc.) are finally available for smaller fleets and van-lifers to order, production capacity apparently having caught up to demand. It’s that van, when ordered in a 12-foot cargo/low roof spec, that pushes that range estimate up to 180 miles. The high-roof version gets a claimed 164 miles of range.
“Our freedom of choice approach with powertrain extends to the Ram Professional lineup with an appropriate solution for last-mile delivery in the Ram ProMaster EV,” says Tim Kuniskis, Ram brand CEO. “With front-wheel drive and a low step-in height, the ProMaster is a solid player and continues to perform well in a wide variety of business sectors, such as the growing home delivery environment, construction services wholesale and IT services among others.”
For 2025, Stellantis has “repositioned” the ProMaster EV step van with a new, lower starting price to match its improved availability. The van can now be had for $69,995 plus $1,995 destination fee. That’s down significantly from the $79,990 starting price for 2024 – proving once again that old adage: good things come to those who wait.
For that money, you get the “All-new” Ram that’s so All-new, in fact, that Stellantis issued almost the exact same press photos they used at the 2024 launch. The order books for the 2025 ProMaster EV officially opened last week.
Electrek’s Take
Commercial vans for regional fleets are a no-brainer. Why? Because fleet managers are focused on the bottom line costs of operating their fleets – and, regardless of their political leanings, EVs cost less to own and operate than comparable ICE models. Until that fact changes, converting whatever assets to they can to electric will remain a priority.
If the “All-new” 2025 model is so similar, the specs so close, the photos so indistinguishable from the 2024 model that it takes your humble author nearly a week to figure if there’s even a story here at all hardly matters for a $10,000 price cut.
SOURCE | IMAGES: Stellantis.
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