Panamax Ships to Face Growing Competition, Report Says

Panamax container ships are finding employment today but face growing competition from larger vessels, especially after the Panama Canal’s larger locks open in 2014,

according to a report by the Rotterdam-based DVB Bank’s Research & Strategic Planning unit.
The Panamax subsector “will have difficulty in defending its market share from the increasing number of larger capacity vessels that will be delivered in the market over the next couple of years,” the report said.
Scrapping will offer little relief. Only nine Panamax container ships, with capacity of 33,000 20-foot-equivalent units, are more than 25 years old.
The report said 938 Panamax container ships totaling 4 million TEUs operate on identifiable trade routes. Of those, 502 ships with 2 million TEUs are on north-south and secondary east-west routes.
An additional 365 totaling 1.6 million TEUs are on primary east-west routes that are increasingly dominated by larger ships with lower per-slot costs.
“While the cascading process is slow, the long-term trend still points to decreasing opportunities for Panamax vessels on these routes,” the DVB report said.
Source: The Journal of Commerce