After the Panama Canal Authority completed the waterway’s $5.4 billion expansion last year, the canal experienced a surge in cargo and the number of transits made by larger Neopanamax vessels. Indeed, last month, the Canal Authority reported a new daily tonnage record of 1.18 million Panama Canal tons after 1,180 ships passed through both the expanded and original locks.
However, as canal traffic grows, it becomes increasingly difficult for the Canal Authority to schedule traffic so ships may navigate through the canal safely and efficiently. To improve operations, the Panama Canal Authority recently announced it will launch what it calls a “state-of-the-art” vessel scheduling and maritime resource management system to “further optimize costs, improve safety and increase the overall efficiency and reliability” of the service it provides.
“This system will help carry the canal’s legacy [of innovation] forward, allowing us to tap the potential of technology to provide better solutions for our customers as we increasingly manage more transits and adapt to shifts in global trade,” Panama Canal Authority Administrator Jorge L. Quijano says.
Every day, more than 40 container ships pass through the Panama Canal, which saves ships a 3,000-mile journey around the tip of South America. Passage through the canal, which may take a full day depending on traffic, requires the careful synchronization of skilled freighter pilots, tugboats, and the enormous doors that separate each lock.
Planners schedule each ship’s passage based on numerous factors, including the nature of its cargo, its arrival time and whether the shipper booked passage ahead of time. Another factor to be considered is that ships with deeper drafts require more water in the locks, increasing transit time.
Humans can manage the scheduling process about 48 hours into the future. Using the new solution from supply chain management company Quintiq, however, they will be able to plan weeks ahead using algorithms and modeling to optimize every route for every ship, says Arnoldo Cano, Panama Canal Program Manager for the ACP Renewal of Processes and Core Systems.
“We’re replacing all of the legacy systems with a single integrated planning and scheduling system, which will make a huge difference,” says Cano. “Using advanced modeling language, we’ll be able to leverage path optimization algorithms and mathematical, constraint and graphical programming to optimize scheduling and resource utilization.”
Among the expected benefits of using the integrated system for the Panama Canal Authority are that it will be able to execute a completely integrated operating plan for its critical resources, including the necessary and critical tugboats, pilots and line handlers. Improved situational awareness and data can drive better decision-making, which in turn will help mitigate operational risk, says Canal Administrator Quijano. Further, the solution will help reduce costs by optimizing the way in which the Canal plans and programs its resources, he says.
There are, as one would imagine, considerable benefits for shippers as well. Most notably, the Canal Authority will be able to significantly shorten vessel waiting times, increase the number of potentially available vessel slots each day and improve the overall reliability and safety of the route.
There certainly is a need to improve vessel scheduling and resource allocation. As of last weekend, 1,000 Neopanamax vessels have made their way through the Panama Canal, averaging nearly six per day. During fiscal year 2016, 13,114 vessels in total made a passage through the Panama Canal. What’s more, Quijano has previously said the Canal Authority projects cargo volumes through the canal to increase by 10 percent to 12 percent this year, as well as continuous growth in coming years, as the shipping industry emerges from its downturn.
What impact do you think the Canal Authority using an integrated solution for vessel scheduling and operations management will have on supply chains?