537
1 INTRODUCTION
The construction of the Canal, which lasted for 34
years,introducedtheshorterandmoreefficientroute
betweentheeastandwestcoastsoftheUnitedStates
ofAmerica.ThePanamaCanalconnectstheAtlantic
and Pacific oceans through the narrow Isthmus of
Panama. Thus, the circumnavigation of
the South
Americawasavoidedandtheroutewasshortenedby
12.875 kilometres. The Panama Canal is situated in
Panama,andisunderthesovereigntyandcontrolof
theRepublicofPanama.TheCanaloperatesusinga
system of locks that raise ships from sea level.
Technology development in the
shipping industry
resulted in the construction of the Post‐Panamax
vessels, which due to their size were not able to
navigate through the system of locks. The arising
problems of transit and navigating through the area
catapulted into the limelight the “third set of locks
project,”whichwasputtovote
andapprovedinthe
nationalreferendum.
The construction of the new and expanded canal
enabled the passage of the Post‐Panamax ships. The
navigationofthiscategorybecameastandardinthe
maritimeindustryandprovedtheCanaltobeofgreat
importancetotheworldshipping.Thelaunchof
the
newPanamaCa nal,allowedthiscategoryofshipsto
experiencegreatfinancialbenefitsandsavingsintheir
operational costs. This paper analyses several world
ports comparing the costsof navigation through the
Canalandthoseusingthesurrounding routes.The
analysis has identified savings in all categories of
shipsand
routesanalysed.
2 THENEWPANAMACANAL
The decision to expand the Panama Canal was
necessary, mainly because it was estimated that the
Canalwouldreachitsmaximumcapacityinbetween
2009 and 2012. In addition, at the time 37% of the
worldʹscontainerfleetcouldnotfitthe
Canaldueto
The Impact of the New Panama Canal on Cost-savings
in the Shipping Industry
D.Zupanovic,L.Grbic&M.Baric
UniversityofZadar,Zadar,Croatia
ABSTRACT:ThepassagethroughthePanamaCanalhasbecometheusualwaterwayforalltheshipsthatcan
navigate through theCanal. The traffic through the canal is limited by the size of a ship. The need for the
expansionoftheCanalhasemergeddue
tothedevelopmentoftheglobaltradeandtheshippingindustry.The
newdimensionsofthelock‐chambersdeterminethesizeoftheshipsaswell.Thenewgenerationofshipsbuilt
tothelargestspecificationspossibletotransitthecurrentlocksofthecanalarecalledthePost‐Panamax
vessels.
The maximum dimensions of these ships are 366 meters in length, 49 meters in beam and 15.2 metres in
draught.Thepaperanalysessavingsintheoperational costsonthreetypesofthePost‐Panamaxvesselsafter
theCanalexpansion.
http://www.transnav.eu
the International Journal
on Marine Navigation
and Safety of Sea Transportation
Volume 13
Number 3
September 2019
DOI:10.12716/1001.13.03.07
538
theirsize.Therefore,MartinTorrijos,thepresidentat
thetime,proposedtheCanalexpansionproject,which
was ultimately approved by three quarters of the
Panamanianvotersinanationalreferendum.
Theproject of reconstruction started in 2008. The
totalcostshadbeenestimatedto7billionUSdollars.
However, the
investors had hoped to return the
investment costs by 3.5% cost raising through the
following two decades. The expansion works were
carried out in four phases, and required the
excavation of more than 150 million cubic metres of
materialand5.5millioncubicmetresofconcrete.Both
ocean‐entrances were
deepened, the new locks
constructed, Gatun lake entrance was widened and
the new access channel built thus bypassing
MirafloresLake.
The Pacific side works started on 1
st
April 2008.
The work entrance consisted of widening the
navigation channel on the Pacific entrance to 225
meters(fromtheexisting195metres)anddeepening
itto15.5meters.Thedredgingupof8.7millioncubic
metresofdirtwasexecuted.
TheAtlanticsideworksstartedon25
th
September
2009bydredging of seabed and excavating the new
entrance.DeepeningofLakeGatunresultedinrising
of the water level by 45 centimetres and increase of
thereservoircapacityby200 millioncubicmetresof
water.
Theworkonthethirdsetwasmostexpensivewith
3.2billion
dollarworthpartoftheprojectenabledthe
passageofNeopanamaxshipsthroughtheCanal.
The Project included the design and construction
oftwosimilarlockcomplexes,oneonthePacificand
theotherontheAtlanticside.Eachcomplexhasthree
chambers and uses nine water‐saving basins. The
construction
ofnewlocksrequiredtheconstructionof
new system of the chamber gates. Instead of the
existingswingdoors,thesystemofrollinggateswas
designed and implemented. New chambers are 427
longand55metreswide,andcanaccommodateships
upto366metreslong.Thechambersare18.3
metres
deep and the maximum allowed draught is 15.2
metres.
Figure1. Comparison of the existing locks and new locks
(http://www.longshoreshippingnews.com/2015/08/maersks‐
newbuilds‐wont‐fit‐new‐panama‐canal/downloadedon25May
2018)
3 PANAMAXANDNEWPANAMAXVESSELS
Panamax is a term used for maximum size of ships
thatcanfitthroughthePanamaCanallocks.Thesizes
ofPanamaxshipsaredeterminedbyconsideringthe
dimensions of the smallest lock of the canal. The
Panamax vessels can be up to 294 metres
long, 32
metres wide and with the draught of 12.56 metres.
Development in technology and larger demands in
themaritime shipping resultedina new design and
constructionofships,whichcouldnotfitthePanama
Canal. Those ships are known as Post‐Panamax or
NewPanamaxvessels.
The construction
of new, larger set of locks has
resultedintheconstructionoflargershipscalledNew
Panamax vessels. The loading capacity of the ships
has increased from 5000 TEU to 14000 TEU. The
expandedCanal is 366 meters long, 49 meters wide,
with15.2metresdraught.
Figure2. Panamax and Post‐Panamax vessel size
comparison (http://yachtpals.com/cruising/panama
downloadedon24May2108)
4 THEPANAMACANALTRANSITTOLL
TARIFFS
Allvesselshavetopaythecertaintollinordertopass
through the Canal. Tolls are calculated according to
ship measurement parameters. The size of a ship is
determinedbyhertype.Thispaperanalyses3types
ofships:
Bulkcarriers,
Containervessels,and
Tankers.
Dry bulk vessel tolls are based on a deadweight
tonnageandmetrictonsofcargo.Typesofbulkcargo
carriers are classified into four categories: grain
carriers, coal carriers, iron ore carriers and all other
typesofdrybulkcargocarriers.
This paperanalyses transit
tolls for the ship that
hascharacteristicslistedinFigure3.Forthepurposes
of the company and ship protection data the paper
willrefertothisshipasBULKCARRIER1.
539
Figure3.BULKCARRIER1particulars
Takingintoconsiderationthesizeoftheshipand
thetollsforthiscategoryofshipithasbeencalculated
thattheoveralltransitpricethroughtheNewPanama
Canal for BULK CARRIER 1 totals 200,215 $ (fully
ladengraincarrier).
The Canal transit costs for container vessels are
calculatedaccording
tonumberofcontaineronboard.
The cargo carrying capacity of container vessels is
expressed in TEU (twenty‐foot equivalent unit), the
unitofthecapacityofacontainership.Thetolltariff
depends on the fact whether the vessels transport
fullyloadedcontainersoremptycontainers.
This paper analyses
transit tolls for the container
shipthathascharacteristicslistedinFigure4.Forthe
purposesofthecompanyandshipprotectiondatathe
paperwillrefertothisshipasCONTAINER1.
Figure4.CONTAINER1particulars
Takingintoconsiderationthesizeofthevesseland
the tolls for this category of vessel it has been
calculated that the overall transit price through the
NewPanamaCanalforCONTAINER1totals354,000
$.
Tanker tolls are be based and priced on
deadweighttonnagecapacityoftankersexpressedin
metric tons. Apart from tonnage capacity, two other
factors are taken into consideration: whether the
vessel is fully loaded or operates without cargo (in
ballast condition). For the purposes of the company
and ship protection data the paper will refer to this
shipasTANKER1(Figure5).
Figure5.TANKER1particulars
Takingintoconsiderationthesizeoftheshipand
thetollsforthiscategoryofshipwehavecalculated
thattheoveralltransitpricethroughtheNewPanama
Canal for TANKER 1 totals 455,450 $ (fully laden
crudeoiltanker)
5 CALCULATIONSANDCOSTSAVINGSUPON
OPENINGOFTHEEXPANDEDPANAMA
CANAL
Thefifthchaptercomparesthepriceoftollsforthree
different types of ship with expenses of
circumnavigation of the South America. In order to
provewhetherthereareanysavingsintheoperation
of ships travelling through the Canal, randomly
selected ports were selected for the purpose of
the
analysis(listedinTable1).
Thetableshowsthedifferenceofmorethan5000
nauticalmilesonthreenavigationalroutesanalysed.
Such a difference in distance may be regarded as a
prolongation of navigation between the port of
departureandtheportofdestinationindaysorhours
ofnavigation.
Table1.Routeoptionsbetweenanalysedports
_______________________________________________
Portof Portof DistanceDistance Distance
departure destination (M) throughdifference
panama (M)
canal(M)
_______________________________________________
1 SanFranciscoAntwerp 13789 7781 6008
2 LosAngeles Gibraltar 12609 7314 5295
3 SanPedro Houston 9649 3851 6798
_______________________________________________
Different speed in different type of vessels has
resultedindifferenceintime.Sincethebulkcarriers
are the slowest ones among the analysed ships, the
navigationcanbelongerformorethan20days,ifnot
passingthroughthePanamaCanal.
540
Table5.CalculationofcostsavingsbynavigationthroughthePanamaCanal
__________________________________________________________________________________________________
VesselFuelcost($) Ship’sThePanamaCanal Savings($) Savings(%)
dailycoststransitcost($)
__________________________________________________________________________________________________
Route1 Bulkcarrier1 477,312288,000200,215565,09773.84
Route2420,134253,500200,215473,41970.28
Route3539,462325,500200,215664,74776.85
Route1 Container11,033,543 195,700354,000875,24371.20
Route2913,130172,900354,000732,03067.40
Route31,174,024 222,300354,0001,042,32474.65
Route1 Tanker1
418,371356,000455,450318,92141.18
Route2369,012314,000455,450227,56233.32
Route3474,780404,000455,450423,33048.17
__________________________________________________________________________________________________
The prolongation of the voyage for one or more
dayscanbeanalysedthroughtheoperationalcostsof
theship.Dailycostscanbedividedandevaluatedin
twoparts:
dailychartercost,
dailyfuelandlubricatingoilcosts.
Dataon dailychartercostscanbe tracked onthe
shipping stock markets. For the purposes of this
paper, the navigation data on 20
th
June 2018 were
analysed.
Thedailyfuelconsumptiondependsontheship’s
specifications. The following table displays
calculation of the fuel consumption for the vessels
analysedinthispaper.
Table2.Analysedvesselsdailycosts
_______________________________________________
Typeof Speed DailyDailyfuel Daily
vessel (kn) distance(M) consumption charter
_______________________________________________
(tons)costs($)
_______________________________________________
Bulkcarrier 13  3125515,000
Container1 24.2 580.822219,000
Tanker115  3365220,000
_______________________________________________
As far as speed and consumption are concerned
containervesselsparticularlystandout.As apartof
door‐to‐door shipping technology, they base their
servicesonfastdeliveryofgoods.Theyhave sucha
designandconstruction,whichallowsthemtoreach
speeds almost twice as those of
other two types of
shipsanalysed.Hereupon,thepaperanalysesbunker
costs by multiplying daily fuel consumption and its
priceon20thJune2018.These dataarelistedinTable
3.
Table3.Totalfuelcostsperanalysedrouteoption
_______________________________________________
Typeof Route1/fuel Route2/fuel Route3/fuel
vessel consumption consumption consumption
_______________________________________________
costs($) costs($) costs($)
_______________________________________________
Bulkcarrier 477,312 420,134 539,462
Container1 1,033,543  913,130 1,174,024
Tanker1418,371 369,012 474,780
_______________________________________________
Apartfromfuelconsumption costs,thefollowing
table specifies daily charter costs for the type of
vesselsanalyzedinthispaper(Table4).
Table4.Dailycharterercostspervessel
_______________________________________________
Typeof Route1– Route2– Route3–
vessel dailycost dailycost dailycos
_______________________________________________
Bulkcarrier 288,000($) 253,500($) 325,500($)
Container1 195,700($) 172,900($) 222,300($)
Tanker1356,000($) 314,000($) 404,000($)
_______________________________________________
AftercalculatingtimeneededifthePanamaCanal
isnotused,bunker anddaily chartercosts, wehave
come upon certain numbers that approximately
represent operational costs for the ports analysed.
ThesecostshavebeencomparedtothePanamaCanal
transitcosts(Table5).
The data in table 5
have demonstrated that the
smallest cost‐savings if passingthrough the Panama
Canalare227,562USdollars,whichisextremelylarge
sum of money. The maximum cost‐savings of the
shipsanalyzedare1,042,342USdollars.
6 CONCLUSION
ThePanamaCanalisthebusiestwaterwayconnecting
thePacificandAtlanticoceans.
Sinceitsopening,the
numberoftransitshasbeentheindicatorofitsgreat
importance for the global shipping. The old
dimensionsoftheFirstPanamaCanalcouldnotsuit
theneedsofthemodernshippingindustry.Thelocks
becametoosmalldespitethedevelopmentofthenew
generation of
ships. Therefore, the global shipping
industrywashinderedbytheinabilityofshipstopass
through this important traffic route. The problem of
the Post‐Panamax vessel‐transit was solved by
openingoftheNewPanamaCanalin2015.Thepaper
hasanalysedthreecategoriesofshipsofthistypeon
threedifferenttrafficroutes.Theanalysishasshown
cost‐savings for all three types of vessels analysed.
The savings range from 33‐76%. If we convert this
percentage into US dollars, the savings range from
227,562 to 1,042,324 US dollars. Hence, it can be
concludedthattheopeningofthe
NewPanamaCanal
hasresultedinsavingsinallanalysedtypesofships
and that these saving can amount to millions of
dollarsforcertaincategoriesofships.
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[5]http://maritime‐connector.com/wiki/panamax od
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