The Dialogue: Latin America Advisors

July 5, 2023

Poten & Partners brokers ships in a number of classes of vessels, including oil and refined product tankers, VLGCs (which carry LPG primarily) and LNG carriers (LNGCs).

Doug and I work primarily in in the LNG market so I thought it would be most useful to comment on this segment.

LNGC transits were not affected directly by the recent draft restrictions imposed by the Panama Canal Authority as the LNGCs that can fit in the locks have shallower drafts than the limits imposed by the Authority. However, LNG carriers would be affected if container ships and other vessels are forced to reduce the amount of cargo they carry in order to be able to comply with the shallower draft restrictions, resulting in a greater number of vessels transiting the canal. This additional traffic could have caused congestion, which could have resulted in additional delays. However, in this case, it appears that the draft restrictions did not lead to significantly greater wait times. One of the reasons is that traffic is normally lighter in the Spring, so this helped. In addition, the authority had begun informing shippers that there were concerns about water levels in late 2022 and began adjusting draft levels then, so shippers had time to adjust routes and loads.

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