A.P. Moller-Maersk has announced a new strategy to deal with the low water levels at the drought-stricken Panama Canal. They will be utilizing a freight railroad to bypass the canal, as the limited number of large ships passing through has impacted their Oceania-Americas (OC1) service. This service, which connects Australia and New Zealand with ports in Philadelphia and Charleston, South Carolina, typically relies on cargo ships to transit the canal.
The Panama Canal Railway, a 47-mile railroad running adjacent to the canal that connects the Atlantic and Pacific oceans, will now be used by Maersk to create two separate rail loops. Pacific vessels will turn at the Port of Balboa in Panama, while Atlantic vessels will turn at Panama’s Port of Manzanillo. This change will allow for a more efficient flow of cargo, with vessels picking up and dropping off cargo based on their destinations.
As a result of these adjustments, the OC1 route will no longer include Cartagena, Colombia. Maersk anticipates minimal delays for northbound vessels but acknowledges that southbound vessels may experience some delays. The decision to use the freight railroad comes after an unprecedented drought in Panama led to reduced transits of larger container ships in November and December.
Despite the challenges posed by the low water levels at the Panama Canal, Maersk remains committed to operating its PANZ sailings that connect ports in Los Angeles, Oakland, and Seattle with ports in Australia and New Zealand. The company is actively working to minimize any impacts on supply chains and is in close communication with the Panama Canal Authority to provide timely updates to customers.
