Ports in Panama expect a boom in 2008

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(panama-realestate) The Panama Canal is one of the world’s major shipping channels, which connects the Atlantic with and Pacific Oceans. Over the last decades, the canal made a huge impact on shipping between the Atlantic and Pacific. For instance, the distance from New York to San Francisco is only 9500 km via the canal but when ships travel around Cape Horn, the distance is 22,500 km.

Due to the geographical advantage, the port business of Panama was always on high. Analysts feel that the port business of Panama will grow even further despite a slow down in the U.S. economy. Analysts and industry experts feel that container traffic of Panama will increase steadily in the coming years. This is mainly due to an increase in Chinese trade. As China is becoming a major industrial nation and exports most of the total world trade, it will increase its trade volume through Panama ports for taking the geographical advantage of the canal.

According to Panama’s top maritime body, the shipping container volumes will increase by a fifth this year. The Panama port authorities expect the principal ports of the country to handle about 5 million ‘20 foot’ equivalent units in 2008.

In 2007, all the ports in Panama handled around 4 million TEU; while in 2006, it handled 2.7 TEUs. The increase between 2006 and 2007 was made possible due to an increase in Trans shipping through the port of Balboa which is situated close to the Panama Canal. Hong Kong’s Hutchison Whampoa runs this port efficiently and hopes to continue the good run in future as well.

Panama’s maritime spokesperson said that in present conditions, they can achieve the goal of 5 million containers easily. This is because, imports of consumer goods and cars from china has increased. Additionally, mineral imports from Latin America have seen a big rise. Even though consumer demand in the US has declined, the fundamentals of a port’s success are still in place and will remain this way through out the year.

However, though billions of dollars have been invested in improving the infrastructure of the Panama ports, it is not yet in a position to handle the huge imports from across the world. Panama’s port business is so promising that several multinational construction companies showed interest in building another port here. For instance, China Ocean Shipping COSCO is keen on building a new ‘billion dollar port’ at the entrance of the Panama Canal.

Since the need of building another port has emerged, the government of Panama is planning to award the project via direct contract and not as a tender. The construction is expected to begin in late 2008.