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The opening of the expanded Panama Canal next year will bring uncertain employment prospects for more than 200 panamax containerships, currently deployed on services transiting the waterway.

According to Alphaliner, there are 238 container vessels of 4,000-5,100 teu operating on services that utilise the Panama Canal, but from next April these ships will be phased-out and replaced by  larger vessels of up to 13,000 teu.

A total of 160 panamax ships are currently deployed on the Asia–US east coast trade, with 155 using the canal and the remaining five on services via Suez.

Alphaliner expects the current 16 Asia-US east coast loops operating via Panama will be rationalised into about 10, deploying ships of 6,000-10,000 teu, while at least four of the nine loops serving east coast ports via Suez are expected to switch to the shorter route afforded by the Panama Canal.

However, as has been seen on the west coast, the short-notice upsizing of containerships puts pressure on ports, as they receive fewer calls but larger exchanges, possibly straining landside operations and disrupting supply chains.

Meanwhile, the concern for owners of the panamax containerships is on what trades can they find regular employment for their vessels?

Most other trades that traditionally operate services with panamax ships are either also increasing the size of the vessels they use, or are in the process of cutting back tonnage due to weak demand.

The average age of the panamax containership fleet is only 10 years, with just 28 ships over 20 years old, making few of them ideal demolition candidates, notes Alphaliner.

Giving a presentation at the recent JOC conference in Hamburg, Alphaliner’s senior analyst for liner shipping and ports, Jan Tiedemann, produced evidence of the the charter hire ‘rollercoaster ride’ for panamax vessel owners over the past 10 years.

At the height of their popularity, in 2005, they were able to command a daily hire of some $45,000, which dropped to around $7,000 during the recession and rose back to over $25,000 in the restocking tonnage shortage that followed in 2010/11.

But with bigger newbuilds coming on stream, the sector bumped along at less than $9,000 a day from 2012 until the latter part of last year, when hire rates spiked at around $15,000. This was caused by demand for extra ships to mitigate vessel delays caused by the US west coast labour dispute and the deployment of bigger ships on intra-Asia services.

However, with an estimated 85 panamax containerships due for redelivery within the next three months owners, ship managers will be desperate to extend charter hire options on almost any terms this year.

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