transportation

Canal to stay busy even if U.S. economy slows down

Canal officials say traffic at the waterway is impacted by a host of other factors.

The rising price of oil could also have a positive impact on Canal traffic as shippers seek to save fuel.

Víctor Arosemena/LA PRENSA

busy:Even if the U.S. economy slows down, traffic at the Panama Canal is expected to remain steady because of other factors, such as rising oil prices.996411

Business at the Panama Canal is expected to remain steady regardless of what happens to the U.S. economy.

This is the opinion of Rodolfo Sabonge, vice president of the Oficina de Investigación y Análisis de Mercado of the Autoridad del Canal de Panamá (ACP). He said that there are other factors that have a greater impact on the tonnage transiting the channel.

The vice president pointed to a number of events that have occured in the last 25 years that have affected Canal traffic, and none of them were related to the U.S. economy. In 1983, a year when the gross domestic product (GDP) in the U.S. increased 5 percent, there was a 15 percent drop in tonnage at the Canal because of a pipeline that opened in eastern Panama.

In 1985, a drought in China forced that country to import more grain from the U.S., resulting in a 10 percent increase in Canal tonnage.

A strike at the U.S.'s western ports in 2004 generated an increase of 10 percent in Canal traffic.

Sabonge said that, in the long term, the government should not be too alarmed about the situation facing the U.S. economy in terms of Canal traffic. But he added that there has been a ripple effect felt here.

"The decline in world trade is affecting ports all over the world. We have felt this decline, but in the long term we do not see that it will have a large impact," he said.

Moreover, the high price of oil, which is seen as a problem in many instances, actually helps the Canal. Expensive fuel means that more ships will be looking to cut down on the distance they have to travel.

"This makes the Canal more competitive because the savings you get by using the waterway are greater than when oil costs are low," Sabonge said. The Canal official made these statements during a conference titled "The Impact of the Panama Canal on International Maritime Trade," which took place during Expocomer 2008 last week.

Sabonge said that Canal traffic has exceeded projections, and that the country needs to expand its port facilities to handle the excess traffic.

Panama has been seeking bids from private companies to develop severl possible port sites. These sites include severalthat are near the Pacific entrance to the Panama Canal.

The Canal is also being expanded to meet the demand of ships looking to use it, as well as to accomodate larger cargo ships that are too big to currently transit the waterway.