Ships transiting the Panama Canal have relatively fewer accidents than those using the Suez Canal or the Kiel Canal, and the number of ship casualties has dropped over the past decade, according to the German insurance company Allianz in a new report, Panama Canal 100: Shipping safety and future risks
But the insurer is cautioning that “potential risks are only set to increase with the creation of a new lane for larger ship transits."
While the existing locks allow transit of ships with maximum capacity of about 4,400 TEU-5,000 TEU, the new locks and other improvements should allow 12-14 ships carrying three times as much cargo to transit the canal each day, wrote Allianz.
“Larger ships automatically pose greater risks. The sheer amount of cargo carried means a serious casualty has the potential to lead to a sizeable loss and greater disruption. For example, a fully-loaded new-Panamax 12,600-TEU container ship — as long as four football fields, with a beam of up to 49 meters — could have an average insured cargo value of $250 million,” the insurer said.
Allianz continued, "If the Panama Canal operates at its full projected capacity following expansion, this could result in an additional $1.25 billion or more in insured goods passing through the canal in just one day. This potentially equates to $460 billion a year, significantly increasing risk accumulation in the region.”
The insurer said the $460 billion figure doesn't take into account the number of vessels lining up on either side of the canal to traverse the new development nor does it include hull values.
However, Allianz also said the canal's safety record has improved significantly over the past decade, and it has seen fewer shipping incidents — 180 during the past 20 years and just 30 in the past decade, compared to 507 at the Suez Canal and 272 at the Kiel Canal in the past 20 years.
Allan Breese, a risk engineer for Allianz and a former master for APL, has made dozens of passages through the canal, both as a member of a ship’s crew and as a professional doing safety audits. He said ships passing through the canal commonly suffer some minor damage such as scrapping or denting of hulls. But he said such minor damage seldom rises to the level of a reportable casualty, in part, because it requires stopping a vessel to make a claim. He does not believe the chance that cargo will be damaged during a transit will increase very much because of the expansion or larger locks.
“If there is a problem, it is more likely to happen to the ships, and the other problem that could happen is undamaged cargo sitting in place or becoming immobilized if the lock was inoperable or there had been an incident that caused traffic to back up and not move," he said.
“There is going to be a learning curve going on with these larger ships,” he continued, noting that instead of ships being held in place by four locomotives during the operation of locks, ships will be held in place by two tugs.
The use of four locomotives, or “mules," to hold ships in place “gave a pilot total control over a ship, which is virtually not in place in any other waterway that I am familiar with," Breese said. But he noted that nearly every large ship in every port is docked with two tugs or bow thrusters, “so there is no reason to believe it is going to be any more hazardous or difficult, or that ships are going to be more prone to damage in the Panama Canal than in any port in the world."
He continued, “In my opinion, the canal has been operated in an extremely safe manner, and there is nothing to lead me to believe that it will not continue to be operated in an extremely safe manner."
The report noted the Panama Canal Authority has invested heavily in training including plans to charter a post-Panamax ship to practice maneuvers through the new lane. More than 2,000 maneuvers of post-Panamax ships have been undertaken on both the Atlantic and Pacific entrances of the canal, and canal pilots have also participated in theoretical and practical training programs in the Berendrecht Locks at the Port of Antwerp, Belgium, which are of a similar size and operation.