A pair of shipping lines are bumping up the size of their existing container vessels in a move that — if it catches on — could hurt traffic at the expanded Panama Canal.
According to maritime newsletter Alphaliner, Mediterranean Shipping Co. and CMA CGM lines are converting up to 21 of their “neo-Panamax” vessels capable of carrying 14,000 cargo boxes into supersized ships that can haul 17,000 containers.
The conversions include lengthening the ships from 1,200 feet to 1,294 feet, raising deckhouses and funnels and raising and strengthening container lashing bridges. All of that work will make the ships too big to fit through the recently enlarged Panama Canal. Ships of that size would have to travel through the Suez Canal in the Mideast to sail from Asia to U.S. East Coast ports.
The ships that are being converted represent about 11 percent of the global neo-Panamax fleet of 190 vessels. Most of that fleet, nearly 75 percent, is deployed on Asia-to-Europe routes. Only 11 neo-Panamax vessels are making the Asia-to-East Coast trip.
While Alphaliner predicts as much as half of the global neo-Panamax fleet could be upsized in coming years, thus making them unable to pass through the Panama Canal, that’s not the biggest concern for canal officials.
“What we worry about the most is the increasing overcapacity that looms in the market due to the ordering of very large vessels (carrying 22,000 containers), which will result in even lower charter rates,” specialists with the canal’s business and development office said in a statement.
They add those ultra-large vessels would make efforts to stretch current neo-Panamax ships “less profitable for carriers.”
Jim Newsome, president and CEO of the State Ports Authority, said the conversions bear watching and could lead to a significant trend if other shipping lines follow suit.
The conversions “seem to confirm that bigger ships are a key strategy of the container shipping industry,” Newsome said.
While that could be bad news for the Panama Canal, which spent more than $5 billion on its expansion to accommodate neo-Panamax vessels, it won’t impact the Port of Charleston….
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