In today’s globalised world driven by population growth, instant communication and increased interconnectedness; the need to meet consumer demand is an ever present one. Indeed, effective management of this demand is one forever plaguing those involved in supply chains where speed, efficiency and cost are just as paramount as delivering requirement to customers. The old adage of ‘Time is Money’ certainly comes to mind here!
Shipping is a huge part of this process albeit a giant cog in a very large mechanism driven by trucks, rail and air freight. All involved in the chartering and management of chemical tankers are all too aware of the importance of managing costs in the face of the regulation stigma and high bunker fuel prices offset against a need to supply customers as quickly as possible. However, whilst all of this is a known quantity how do countries that are integral to keeping a globalised world moving rise to this challenge?
Let us take the Panama Canal expansion project as an example. This huge project to enlarge the capacity of the canal by adding two new locks (with three chambers) at both the Pacific and Atlantic ends at estimated total cost of $5.25 billion is no doubt one of the biggest engineering projects of the century. It will be hugely beneficial to Panama in generating jobs and revenues for the state on what is already a very busy shipping lane. The key point of this project is Panama’s response and recognition of the growing demand from China which despite the dwindling figures of recent times is now recovering again. Naturally, this calls for bigger vessels with larger capacities. After the expansion, the canal will be able to handle post-panamax size vessels. A lesser issue is one of competition with naturally occurring shipping lanes such as the Northwest Passage in the Arctic becoming a more plausible option however this is not expected to be an immediate threat.
So how, you may ask, does this affect the highly diverse world of Specialised Products?
Well, it doesn’t. The vessel sizes used in this sector will not be affected by the expansion since all sizes can pass through the canal in its current state. The only thing worth mentioning is that pre-booking passage might be more cost sensitive due to increased use and tariffs may also change. It is important to note however that this is not confirmed at this stage. But while it might not affect our sector directly the message here is one of how does the world rise to growing demand? The Panama Canal is one such response but other countries, integral to shipping lanes, should take note of this timely and robust approach. The UK for example is due to open the Thames Gateway in Essex at the end of next year and it will be capable of handling the biggest container ships on the water. The fact of the matter is that by 2030 there will be another 1.3 billion people in the world. Never has the logistics challenge been so important and with projects as large as Panama it will help ensure the speed and efficiency our industry needs to meet this demand in the future!