COROZAL PORT PROJECT
Panama Canal:
100 Years Connecting the World
Since its opening in 1914, the Panama Canal
serves world trade, shortening distances, time
and transportation costs between production and
consumption centers. Today, the Panama Canal
connects 144 maritime routes, reaching 1,700 ports
in 160 countries.
This international trade artery is also an important
driver of Panama’s economy. In fiscal year 2014, the
Panama Canal Authority (ACP) contributed US$1.03
billion to the National Treasury, 6.6 percent more than
budgeted.
Tonnage and Transits Evolution:
Tonnage and transit indicators through the Panama
Canal grew proportionally up to the mid-70s when
larger tonnage vessels were deployed. In the early
80s, traffic stabilized in the range of 12,000 to 14,000
transits per year, while the tonnage continued to grow.
Refer to Figure Nº 1.
In the last two decades, the main contributor for
tonnage growth, measured in Panama Canal Universal
Measurement System (PC/UMS), has been the full
container ships segment, due to the growth of world
trade and globalization. The increase in free market
economies, the removal of trade barriers and the
signing of free trade agreements have encouraged
the location of production facilities at sites with lower
labor costs, commonly distant from the main centers
of consumption.
Since its opening, the bulk carriers led Panama Canal
transit levels, until 2001, when China’s entry into
the World Trade Organization (WTO) changed this
pattern. Immediately, the container segment showed
a rapid growth that impacted the tonnage through
the Panama Canal. Later, this segment suffered a
contraction due to the global economic crisis in 2008,
which lasted until 2010 (Refer to Figure Nº 2).
Between 2011 and 2012, this segment showed signs
of recovery. However, since 2013, there has been a
decrease.
Figure Nº 1: Transits vs Panama Canal Tonnage FY1914 - FY2014
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Corozal Port Project - Panama Canal
140,000,000 PC/UMS Tonnage in millions 120,000,000 100,000,000 Refrigerated Dry Bulk 80,000,000 Liquid Bulk Container 60,000,000 Vehicle Carrier/RoRo 40,000,000 Passengers Others 20,000,000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiscal Year Figure Nº 2: Evolution - Tonnages by segment FY 1999 - 2014
The competitiveness of the container segment has
been affected due to the construction of bigger vessels
that are not able to transit through the current locks
system. At the end of fiscal year 2014, the container
segment accounted for 46 percent of Panama Canal
transit revenues.
The new locks will handle larger container ships with
a capacity of 5,000 TEUs to 13,200 TEUs.
Panama Canal Expansion Program
After years of analysis indicating that larger vessels
would be deployed and that the Canal would not
have the capacity to meet future transit demands, the
Panama Canal submitted a proposal to expand the
existing canal to a national referendum, which was
approved by the people of Panama on October 22,
2006.
The main objective of the Canal Expansion is to
increase capacity and satisfy the increasing demand
of transit service while improving the Canal’s
competitiveness.
The Panama Canal Expansion consists on the
construction of new lane of traffic along the waterway
through the construction of a new set of locks to
double the waterway’s capacity. Figure Nº 3 shows
the dimensions of the new locks.
Corozal Port Project - Panama Canal
Figure Nº 3: Current and New Locks
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With the Panama Canal Expansion, Panama becomes
a backbone for international trade and a strategic
partner for several countries using this route.
Port Growth and Relationship with the
Panama Canal
Annually, the compound aggregate growth of
Panamanian container ports between 2001 and 2012
was 14% percent. After a decline in 2013, the level
of container movements were recovered in 2014, as
shown in Figure Nº 5.
The Panama Canal is the backbone of the country´s
logistics assets. The modernization of Panamanian
ports began in the early 90’s through concession
models granted to international private port operators,
such as Manzanillo International Terminal (MIT), Colon
Container Terminal (CCT- Evergreen) and Panama
Ports with two terminals (PPC-Cristobal in the Atlantic
and Balboa on the Pacific). In 2011, Port of Singapore
Authority (PSA) entered the market.
Refer to Figure Nº 4.
Figure Nº 4: Panama Port Development
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Corozal Port Project - Panama Canal
Panamanian Port Throughput 2001 -­‐ 2014 (million TEU's) 8.00 6.63 Million of TEU's 7.00 6.86 6.56 6.77 5.59 6.00 4.65 5.00 4.07 4.24 4.00 3.00 2.00 1.58 1.66 2.41 1.98 2.77 3.03 1.00 0.00 01
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Figure Nº 5: Panamanian Port System Throughput 2001-2014
In recent years, the Panamanian Port System has
been affected by different factors. Some terminals
have experienced labor issues that have created
delays in the service. Additionally, port terminals on
the Pacific side have been operating very close to
capacity, affecting their operation efficiency. Located
on the West side of the Pacific entrance to the Canal,
the PSA terminal has limitations related to its rail and
road connectivity to the Atlantic ports. In regards
to the ports on the Atlantic side, two of them have
expansion plans.
In addition, there has been a decline in container
vessel transits through the Panama Canal because
of redeployment of larger container ships through the
Suez route. This migration is due, mainly, to the new
ships that were built and started operations but are
unable to transit through the current Canal. Once the
new locks are operational, it is expected that these
vessels will be redeployed through the Panama route.
A natural consequence of the Panama Canal
Expansion is the deployment of Neo-Panamax
vessels. By deploying these vessels through Panama,
it would be optimal to do transshipment operations as
close as possible to the Canal route to interconnect
different sub-markets in one containerized cargo hub.
In the case of Panama, a convergence of trade in the
east-west with north-south routes of the Americas
Corozal Port Project - Panama Canal
is generated, which provides the opportunity for
greater transshipment demand that requires more
port capacity. There is the potential to capture
transshipment volume expected after the Expansion
is completed by offering greater port capacity in the
Pacific sector.
Pacific Coast Port Development:
If we do not increase port capacity in the Pacific, the
additional transshipment volume that would arise
from the Canal Expansion, would have to be handled
in other regional ports/hubs such as Buenaventura
(Colombia), Lazaro Cardenas (Mexico) and Callao
(Peru) in the Pacific Coast, and Cartagena (Colombia),
Caucedo (Dominican Republic), Kingston (Jamaica)
and Freeport (Bahamas) in the Atlantic.
Panamanian ports are located naturally closer to
the interoceanic route, but if port capacity is not
increased, shipping lines would have to transfer their
operations to other ports in the region. This would
adversely affect the logistics/port competitiveness of
the route, with subsequent loss of potential revenue
for the country. Refer to Figure Nº 6.
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Corozal Port Project:
The Panama Canal, with the support of international
consulting firms, has been undertaking several studies
for over two years for the development of a new port
in the Corozal area of the Panama Canal. The studies
evaluated demand projections, conceptual design of
the terminal, business models, financial analysis, risk
assessments, preliminary environmental studies and
social impact assessment of the project.
Figure Nº 6: Other Ports/Hubs in the Region
Note: Numbers indicate port movements and port cranes in 2013.
Based on these studies, a prequalification and public
tender process was approved to grant a concession to
a port operator for the design, construction, equipment
provision and operation of a transshipment container
port in an area in Corozal which is under Panama
Canal jurisdiction. This will include the construction
of a wharf, container yard, superstructures, such
as offices, warehouses, stores, sheds and/or other
infrastructure required for the efficient operation of
the port, in return for a concession payment to the
Panama Canal using fixed and variable rates. See
location on Figure Nº 7.
Figure Nº 7: Location of Corozal Port
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Corozal Port Project - Panama Canal
The new terminal will be built within a 120-hectare area
that is currently owned by the Panama Canal. The new
port terminal will also include the construction of port
facilities capable of handling Neo Panamax vessels.
With a terminal of 16.3-meter-deep access canal and
a depth of 18 meters along the dock, the new facility
will provide docking facilities for five Neo Panamax
ships. The port will have the capacity to handle more
than five million TEUs.
The two-phased port project will include the
construction of a 2,081-linear-meter dock, a
container yard, offices and warehouse facilities within
a 120-hectare area owned by the Panama Canal.
The project’s first phase will include 1,350 linear
meters of quays, a container yard, superstructures,
and three docking positions for simultaneous calls by
Neo Panamax ships, and an approximate handling
capacity of three million TEUs annually.
The second phase will include 731 linear meters of
quays, with an additional capacity to operate and
manage two additional Neo Panamax ships and
approximate handling capacity of two million TEUs
annually. Refer to Figure Nº 8.
Figure Nº 8: Corozal Port
The contract will, most likely, consist of a 20-year
concession, renewable for 20 additional years.
Social Benefits and Environmental Aspects
Throughout its construction between 2016 and 2018,
it is expected that the terminal could generate an
estimated 1,300 direct jobs.
During the first phase, an estimated 800 workers
could be required for its construction, depending on
market demand conditions.
When operational, the terminal could require up to
2,600 direct employees to efficiently manage the
project’s first phase. Once the second phase starts,
it is estimated that 3,800 direct jobs will be created.
To better benefit the neighboring communities, the
Corozal Port will be constructed and operated under
the “green port” model to:
Protect the community from harmful environmental
impacts that may result from port operations;
Reduce greenhouse gas emissions and other
emissions from port operations;
Use the best technology available to prevent or
reduce environmental impact;
Promote sustainability;
Position the port as a leader in environmental
management and compliance;
Implement sustainable practices in the design,
construction, operation and business processes
in the port;
Improve environmental performance of port
structures while maximizing long-term economic
benefits.
Taking into account these principles, the terminal
considers the use of electrical equipment to reduce
CO2 emissions from port equipment, as well as the
use of leading edge technology to supply electric
power to vessels, resulting in reduced CO2 emissions
produced by ships while at berth. In general, the goal
is to keep stakeholders, including local communities
and authorities, informed on the project’s progress.
Corozal Port Project - Panama Canal
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Panama Canal Authority
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For more information: (507) 276-2436
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