The opening of the long-awaited Expanded Panama Canal will inflict a severe blow to the classic panamax market, i.e. the fleet of 4,000- 5,300 teu vessels, according to Alphaliner, as they are phased out of service and sent for scrap.
This sector is already most affected by the general containership oversupply as classic panamax ships have been massively displaced from service over the past eight months.
Vessel cascading and service restructurings have forced these ships out of several of their core trades, with very limited alternative employment opportunities. Idling and lay-ups of classic panamax ships have been building up over the past few months, while scrapping has also accelerated, Alphaliner said.
As a consequence, panamax ships as young as 14 years were sold to scrap buyers.
What is more, it is expected that in the coming months, the influx of 6,000-10,000 teu vessels into trans-Panama services will accelerate the redundancies of classic panamaxes.
Demand for maxi-panamaxes, a sub category of classic panamaxes optimized to make full use of the existing Panama locks dimensions, is vanishing as well, as the opening of the larger locks seals the ships’ fate.
“After having been the kings of the container trade in the two decades that followed the launch of the first generation of maxi-panamax containerships in 1972, and so far the optimal choice for services requiring a Panama transit, these vessels are now facing their demise,” Alphaliner said.
The new Panama Canal locks will be inaugurated on Sunday 26 June by a China COSCO Shipping’s container vessel Andronikos, a 9,400 teu neo-panamax vessel.
The USD 6 billion expansion project that began in 2007 will allow for the passage of the Post-Panamax vessels with up to 13,000/14,000 TEUs, doubling the canal’s capacity.