‘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.
Conversations around Tesla’s reputation leaned toward the negative throughout 2023, but it depends on who you’re talking to, reports YouGov.
What’s the ‘Buzz’ about Tesla’s reputation?
The global market research firm conducted polls about what it calls the “Buzz” around Tesla – that is, what people are hearing about the brand – and whether there’s been a change in the proportion of people considering driving its EVs following recalls and recent negative headlines.
YouGov asked US adults about “Buzz” between January 2023 and April 2024:
Over the past two weeks, which of the following brands have you heard something POSITIVE / NEGATIVE about (whether in the news, through advertising, or talking to friends and family)?
Tesla’s Buzz scores stayed consistently negative through 2023 among YouGov’s “all US adults” category, with an average score of -7.1 in a score range of -20 to 90, and its scores dipped a bit further following the Autopilot ADAS recall in December.
Tesla’s customer base had considerably higher Buzz scores in 2023, meaning they were more likely to say they were hearing positive things about the brand. Current Tesla customers averaged a net Buzz score of 61.8, and that steadily increased in the early half of 2023 before stabilizing.
Would you still buy a Tesla?
Here’s where it gets interesting.
YouGov asked consumers between January and December 2023 whether they’d consider a Tesla when making a future purchase, and 70% of current Tesla owners said they would consider buying a Tesla.
In the “all US adults” category, unlike Tesla’s negative reputation results, it’s a positive percentage: 7.7% say they would consider Tesla for their next car purchase, and scores in this group have shown no significant change since Q1 2023.
YouGov concludes that “news of brand recalls has not played a significant role in shaping consumer consideration for the brand, particularly among Tesla’s customer base.”
Electrek’s Take
This is intriguing but not shocking. Tesla has a highly loyal customer base. The lease is about to end on my Tesla Model 3. We planned to sign a new lease for a Model Y. The recalls haven’t bothered me much, but all the turmoil that Fred and Jamie have reported on in recent weeks has. It’s most definitely killed my Tesla buzz.
When I leased this Model 3, I felt excited and proud. Now I feel disappointed and deflated by what’s happened at Tesla in recent weeks, thanks to Elon Musk’s layoffs and his bizarre decision to wipe out the entire Supercharger team. One of the best things about driving a Tesla is the Supercharger network.
Plus, it’s important to note that YouGov’s poll about next car purchases doesn’t extend into 2024, so it’d be interesting to see how all the recent drama has affected Tesla’s reputation with Tesla drivers.
I’m still considering a Tesla for my next car selection because, well, Tesla drivers know why. But I’d have to hold my nose while making that choice – I know it’s probably still good for me, but it’s now a bitter pill to swallow.
Read more: I just bought my very first Tesla. Here’s what happened
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Tesla has released a new video of a prototype of Optimus, its humanoid robot, and it created some controversy as some disagree about how impressive it is.
Last month, Elon Musk gave an update on the timing for the rollout of Optimus. The CEO says that Optimus is already performing factory tasks inside its lab. He believes that Optimus will be used to perform real tasks inside actual Tesla factories by the end of the year.
Furthermore, Musk said that he believes Tesla could start selling its Optimus humanoid robot to customers outside of the company by the end of 2025.
This is a very aggressive timeline, nothing unusual for Musk at Tesla, but the company has gained some credibility on the project in recent months.
Late last year, Tesla unveiled “Optimus Gen 2”, a new generation of its humanoid robot that should be able to take over repetitive tasks from humans.
The new prototype showed a lot of improvements compared to previously underwhelming versions of the robot, and it gave some credibility to the project, which was laughed off by many when first announced with a dancer disguised as a robot for visual aid a few years ago.
However, everything Tesla showed in the Gen 2 update was done through teleoperation of the robots.
Now, Tesla has released a quick update video about Optimus and it shows the robot performing some tasks with end-to-end neural nets:
In the video, Tesla shows Optimus moving battery cells from one tray to another. First, by itself, and later, in cooperation with an industrial robot.
Tesla does share a shot of engineers training the robots with what appears to be VR systems:
However, some believe that this shows Tesla is still pretty early in its software development for the robot:
Milan Kovac, the engineer in charge of Optimus at Tesla, also shared some comments along with the video update:
The engineer confirmed the new neural net used to power the humanoid robot:
We’ve trained and deployed a neural net allowing Optimus to start doing useful tasks, such as picking up battery cells coming down a conveyor and precisely inserting them into a tray.
Kovac says that Tesla is now working to make Optimus faster, as well as capable of dealing “with more adverse terrains”.
Electrek’s Take
To be honest, I wouldn’t worry too much about the status of software development.
As a whole, it’s clear that the AI space is moving ultra-fast right now, and it feels like the right time to develop general-purpose humanoid robots to take advantage of it.
Even if Tesla isn’t the one to solve AI, it is valuable to have a hardware package that can do lots of things with the right AI. I could see Optimus becoming that thanks to Tesla’s experience deploying efficient and affordable AI hardware and power electronics in vehicles.
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A 208-megawatt (MW) solar farm with 80 megawatt hours (MWh) of storage has come online west of San Antonio, Texas.
Solar + storage developers Cypress Creek Renewables brought Zier Solar + Storage online in Brackettville, Texas, on May 2, 2024. Zier can produce enough energy annually to power 41,600 homes.
Cypress Creek says that ERCOT, Texas’s grid, has already used Zier to ease supply strain.
“Texas needs every available megawatt, and low-cost renewable energy has proven critical as it continues to reach new production heights in ERCOT,” said Judd Messer, Texas vice president of Advanced Power Alliance. “Solar energy is ensuring sufficient capacity during daytime peak, setting records nearly every month, and quick-responding energy storage delivers a substantial reliability benefit when demand soars or when dispatchable energy unexpectedly falls offline.”
The project will provide $11.5 million in tax revenue to Kinney County with an additional $11.7 million earmarked for an independent school district.
Cypress Creek has a 6-gigawatt (GW) pipeline of 24 projects in construction or development in Texas. That includes a 100 MWh standalone battery storage project in Rosenberg, near Houston, expected to come online next month.
Texas is No 1 in the US for solar capacity. The state already has nearly 23 GW installed, and the Solar Energy Industries Association expects an additional 41 GW of solar to be installed over the next five years.
Read more: Solar to displace natural gas in the daytime + in summer on the Texas grid
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