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Shipping Lines Expect Asia-U.S. East Coast Trade to Increase by 12% Next Year, Want Greater Access to Booking Slots at Panama Canal

Date: 21-OCT-2005

RECENT CUSTOMER SATISFACTION SURVEY UNVEILS ASSESSMENT
OF PANAMA CANAL OPERATIONS

 PANAMA CITY, Panama, October 21, 2005 – Trade between Asia and the U.S. East Coast is predicted to grow at a rate of 12 percent each year, as was told to the Panama Canal Authority (ACP) by various shipping lines in a recent customer satisfaction survey. A total of 55 shipping lines, 35 shipping agents and 825 vessel captains participated in the survey to assess the Canal’s current operations. Among the other key highlights revealed: demand for the Panama Canal continues to grow and is higher than ever, reliability of the Canal is the most important factor behind transiting the Canal and half of the shipping lines that participated in the survey revealed that they have or will have Post-Panamax vessels in their fleets, in the short term, and most of them said they would deploy Post-Panamax vessels in the Canal, if the option was available.

The Panama Canal’s capacity is now approximately 93 percent. With a continued increase in demand, the ACP is working on completing its long-term, strategic business plan, the “Master Plan,” that will determine the fundamental direction of the Canal to the year 2025, including: projects underway, new modernization and improvement initiatives and whether to expand the Canal. At this time, a final decision on whether to expand the Canal has not been made.

Since the U.S. handover of the Canal to Panama in 1999, the waterway has proven itself a reliable route for international trade, especially in light of the recent congestion at the U.S. West Coast. The Canal’s reliability was not only noted by the shipping lines that participated in the survey, but also can be evidenced by increased usage of the ACP’s booking system (use of reservations), which increased to 91.3 percent from 86.9 percent in FY 04. To maintain greater reliability at the waterway, the ACP announced that in 2006 only two lane outages need to be scheduled to perform routine maintenance. The reduction in outages will make it easier for vessels to obtain reservations, increasing reliability. Moreover, the ACP also announced today that in December 2005 two additional booking slots will be created, providing shippers greater variety to transit the waterway. Other capacity building projects slated for completion in 2006 or 2007 include: the establishment of a new tie-up station north of Pedro Miguel Locks, the completion of the locomotive replacement program, the acquisition of five of the most powerful and maneuverable tugboats, and the completion of the tow track replacement program. All these improvements will reduce the need for lane outages, enhancing capacity, reliability and quality of service.

“Everyday at the Canal, our workforce is taking extra operational measures to ensure first-rate customer service. This survey has proven to be a great tool in analyzing the waterway’s operations and how our service directly impacts our customers,” said Rodolfo Sabonge, ACP Director of Corporate Planning and Marketing. “We strive to not only meet, but to exceed our customers’ expectations. Whether it’s increasing booking slots or performing maintenance at the Canal, we do it for them to ensure seamless operations.”

Also revealed in the study was a statement by the shipping lines that they would use Post-Panamax vessels to transit their goods to market. For the past two years, the ACP has commissioned research and studies related to the Canal’s modernization and the future of the maritime industry, including whether to expand the waterway. Although there is currently not a final decision on whether to expand the waterway, the potential project could involve the construction of a new set of locks that would create a third lane of traffic, serving to increase current capacity and afford a wider passage for larger vessels, namely Post-Panamax ships.

Committed to providing a safe, efficient and reliable operation, the ACP conducted the survey to gain valuable feedback from the Canal’s principle users – its customers. The first survey of its kind, the ACP is taking measures to obtain this information on a continued basis.

About the Panama Canal Authority

The Panama Canal Authority (ACP) is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the ACP is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the ACP’s Web site: www.pancanal.com.


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