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A Maersk ship in the Panama Canal

Stock Photo: Ellen McKnight/Shutterstock

Maersk to Implement ‘Land Bridge’ to Bypass Drought-Hit Panama Canal

Mike Schuler
Total Views: 27342
January 10, 2024

Maersk has announced plans to modify one of its services through the Panama Canal by implementing a so-called “land bridge” across Panama amid transit restrictions caused by the ongoing water shortages.

The drought in Panama has prompted the Panama Canal Authority (ACP) to make transit adjustments reducing the overall capacity of the Canal, including reducing both the number of daily transits and the maximum draft of vessels, based on current and projected water levels in Gatun Lake. The changes have contributed to worsening congestion and exorbitant fees to jump the queue.

To ensure minimal disruption to its customers, Maersk has made alterations to its services and, in particular, will modify its OC1 service operating between Oceania and the Americas. Instead of using the Panama Canal, vessels on this route will now utilize a “land bridge” that involves rail transportation across the 80 km stretch of Panama.

While this strategy is only being implemented on a single service, it highlights the innovative ways carriers might adjust routes to lessen the blow from disruption to shipping through the Panama Canal as the ongoing drought threatens the efficiency of the waterway.

Maersk's OC1 service map
Maersk’s OC1 service

Maersk says the change will result in the creation of two separate loops, one in the Atlantic and one in the Pacific. Pacific vessels will turn at Balboa, Panama, dropping off cargo heading for Latin and North America and picking up cargo heading for Australia and New Zealand. Atlantic vessels will turn at Manzanillo, Panama, dropping off cargo heading for Australia and New Zealand and picking up cargo heading for Latin and North America.

For northbound vessels with routes including stops in Philadelphia and Charleston, there are currently no delays. However, southbound vessels may experience some delays. As part of the adjustments, the OC1 route will also omit Cartagena.

Maersk will continue operating the PANZ service from the US West Coast to Oceania, providing coverage from both coasts. Additionally, the company will establish connections between ports in the Gulf and the OC1 service to its maintain current level of operations.

“We are working diligently to minimize any impacts to your supply chain, and we remain in close contact with the Panama Canal Authority to ensure that we can give you timely updates,” Maersk said in its advisory.

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