Panama Woes Becoming Fernandina Woes

The Panama Canal

By Mike Lednovich

A year-long drought is limiting the number of ships able to pass through the Panama Canal and thus is reducing the number of ships coming into the Port of Fernandina.

Nassau Marine Terminal Director of Operations Greg Haehl reported to the Ocean Highway and Port Authority last week that port traffic has been reduced by about 40% in December due to restricted traffic through the canal.

“If we went back to October we would have forecast eight vessel calls for December,” Haehl said, reporting the port had five ship calls for December. “Because of Panama Canal restrictions, we’re seeing fewer ships, and it’s affecting some of our customers in a big way. There have been workarounds, so we think some of those customers have found a way to get through the canal.”

Last week, canal authorities cut daily ship crossings to 24, down from 38 a day in normal times last year. Canal authorities reported that in the first quarter of the fiscal year, the passageway saw 20% less cargo and 791 fewer ships than the same period the year before.

The Associated Press reported canal authorities attributed the drought to the El Nino weather phenomenon and climate change and warned it was urgent for Panama to seek new water sources for both the canal’s operations and human consumption.

“The costs to get some of the bigger ships through, 10 years ago, it was $500,000. A few months ago, it was $3 million per ship. It is a hindrance to some of our customers. It can block them, delay loads, delay calls and delay volumes,” Haehl said. “We’re happy to see our customers are working around it. Finding ways to get ships through the canal.”

According to the tonnage report provided at the meeting, tonnage was down 120,000 tons in 2023 compared to the previous year. The biggest decline was in plywood, Kraft linerboard imports, and container tons.

Haehl said the port is profitable with five-plus ships per month. He said Nassau Marine Terminal has no control over the amount of cargo on each ship. “What we can influence is the acquisition of new customers,” he said.

Haehl reported his company recently hired a commercial resource based in Jacksonville to recruit new customers.

A new customer this month is a company storing container-sized electrical transformers for solar farms that are now coming into the port.

“We could see volume (from them) for one to three years,” he said.

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