Panama Canal rates next year likely to influence future seaborne coal trade

The impact of the Panama Canal expansion on the global coal trade will come into sharper focus next summer when the canal's governing authority is likely to release rates for the new lane, said a shipping expert after a Senate Committee on Commerce, Science and Transportation hearing on the expansion.
Speaking to Platts after giving testimony to the committee, John Vickerman, president of Williamsburg, Virginia-based Vickerman & Associates LLC, said the authority will have to release its rates at least a year before the canal opens.
According to the Panama Canal Authority, the new lane is expected to open in June 2015.
Vickerman suggested in the hearing and afterward that that date might be too optimistic, saying the expansion could open as late as early 2016.
"It's a huge project, a wonder of the world," Vickerman said. "They are trying very hard."
Vickerman said that not much coal moves through the canal and isn't sure how much would after the expansion, given how much larger bulk ships can be when compared with container vessels.
Most of the bulk commodoties that currently move through the canal are grains.
As an example, Panamax ships displace roughly 75,000 deadweight tons. The expanded canal is slated to handle ships to roughly 125,000 deadweight tons.
However, bulk ships are often much larger, including Capesize vessels that displace roughly 175,000 deadweight tons.
Capesize vessels, often with drafts of 50 feet, currently can load coal at Virginia's Hampton Roads terminals but would still be unable to transit the expanded canal.
Source: Platts