December 2000 Customer Newsletter

Canal Improves Efficiency And Safety Indicators During the first year under It is noteworthy that the safety have contributed to reduce the number Panamanian administration, the Panama record was achieved while the of accidents, in spite of the increase of workforce performed Gaillard Cut widening efforts are Universal Measurement exceptionally well, managing record underway. Transits by System (PC/UMS) tonnage. transits by Panamax vessels and, at the vessels require great coordination In addition, the professionalism same time, achieving an excellent safety between the pilots assigned to the ships displayed by the Canal workforce, record (16 accidents during transits and the personnel and equipment coupled with the technological under the command of a Canal pilot). working in the Cut-widening project, advances already in place, permitted This record represents 0.16 percent of 24 hours a day. reducing Canal Waters Time (CWT) from total transits and it is below the figures At present, the Panama Canal has 33 to 29.7 hours, thus demonstrating the recorded for the past two years. 289 pilots, of which 264 are commitment of all with the safe and According to reports provided by the Panamanians. The progressive efficient operations of the Panama Board of Local transition to this large number of Canal. There is no doubt that Panama Inspectors, from a total of 9,762 ships Panamanian pilots was seamless due can do it and can do it well. Our that transited the Canal between January to the fact that 97 percent of the performance during these first months of and September, only 16 suffered workforce was already Panamanian by Panamanian administration is a accidents. During that period in 1999, the time the Canal was turned over to testimonial of our deeds, and we are the accident rate was 0.2 percent, while Panama. The experience and training proud to say this to the maritime in 1998, it was 0.18 percent. of the Canal pilots are key factors that community.

Personalities Express Their Views About The Panama Canal Administration The Latin American Presidents and Chiefs of State, gathered in Panama for the X Former President Latin American Summit held November 17 to 18, 2000, certified the efficient James Carter, during a recent visit to this operation of the Panama Canal under Panamanian stewardship, the full country, assured that Panama is consolidation of the Republic of Panama as a sovereign State, and the strengthening managing the Canal as well as the U.S. of its national identity and democratic vocation, as essential elements to foster and government or even better, referring to strengthen the relations and historic ties that bound the Latin American community the first year of Panamanian stewardship of nations. The written statement signed by the Latin American Presidents and Chiefs of the waterway. Carter, who made the of State, evidenced the satisfaction of these dignitaries for the efficient operation of historical decision of turning over the the waterway under Panamanian stewardship and the measures taken by the Canal to Panamanians through the Panamanian Government to insure the safe, uninterrupted and efficient operation of signing of the Torrijos-Carter Treaty of the Panama Canal and its modernization plans to continue serving world trade and 1977, recognized the admirable work of navigation. the people of Panama who received this great feat of and managed it, during this first year, beyond expectations. Engineer Gilberto Guardia, the first Panamanian Administrator of the Panama Canal and the first foreign national to serve as chief executive officer of a U.S. agency, expressed satisfaction and pride of the achievements and abilities demonstrated by the Canal administration and its workforce in the stewardship of the waterway. Mr. Guardia urged Panamanians to continue with the studies to expand the Canal watershed and to complete those leading to the next Canal expansion. Sustained Growth of Panamax-Size Vessel Transits

Transits by Panamax-size vessels, 2000 when 323 less those of 100-feet beam or more and the transits were Total Transits largest vessels that can transit the reported, Panama Canal, maintained their representing a loss Month 100' Beam and Over increasing trend and rose 6.5 percent of almost a vessel Total during the first eleven months of per day, as compared 1999 2000 1999 2000 calendar year 2000. During the January to the same period Jan 340 350 1,262 1,155 to November period, the Panama Canal during the previous Feb 334 352 1,245 1,188 reported 4,048 transits by Panamax-size year. T h e Mar 329 376 1,359 1,346 vessels, 247 more transits than those increasing Apr reported during the same period in 1999. proportion of transits 330 383 1,386 1,332 During the period in review, Panamax- by Panamax-size May 339 349 1,284 1,168 size vessel transits represented 32% of vessels impacts Jun 340 379 1,062 1,124 total transits and 35.7% of total negatively on Canal Jul 379 334 1,120 1,040 oceangoing commercial transits. This capacity as a Aug 364 372 1,121 1,045 increasing trend started in the early consequence of the Sep 1970's, but at that time Panamax vessels one-way traffic 320 355 965 1,013 accounted for only 2.0 percent of total restriction for large Oct 382 419 1,092 1,125 transits. Transits by containership vessels in the Nov 344 379 1,026 1,063 vessels increased by an impressive Gaillard Cut. The Total 3,801 4,048 12,922 12,599 10.3% maintaining their upward trend, accelerated Gaillard and surpassing the average growth rate Cut Widening of 8.9 percent depicted during the last 4 Program, scheduled years. Accordingly, total transits for completion in December 2001, without compromising safety, thus depicted a decline of 2.5 percent during will allow for flexible two-way traffic increasing Canal capacity. the period January through November of wide-beam vessels in the Cut

Canal Transits and Cargo Information

During the period January to November of Major Canal Cargo Flows 1999 Principal Commodities January - November calendar year 2000, shipments of grain, the leading 2000 Canal commodity group, decreased by 4.5 percent 45,000

s to 36.1 million long tons from the 37.8 millions

d 40,000 n registered during the same period in calendar year a 35,000 s

u 1999. This drop in grain shipments reflects six

o 30,000 h

T 25,000 consecutive monthly declines from May to

n i

20,000 October, only reverted by a 1 percent increase s

n 15,000

o posted in November. A steady supply of corn from T

10,000

g to the Asian market, as well as the increasing n 5,000 o use of corn substitutes for animal feeding in South L 0 s d s s d d Korea and Japan, have negatively affected U.S. corn t e e n d s n n r c i t z m a a n i u a u

c u r l t l a r r o d

u exports to Asian countries through the Panama e e e c a e l g G o n d e n a r o r b o i t f o o r a C a r P r u t S m I t

c Canal. Transits by full-containerships remained

e n P f u n d a P o L o n a M

C strong. Containerized cargo flow grew by 13.3% registering 31.5 million long tons from the 27.8 millions reported in 1999. The second leading Comparative Data for Selected Commodities (in long tons) commodity group drove an increase of 13.5% in January to November tolls collection and accounted for 22.6% of the total Commodity % change tolls generated by transit operations. Petroleum and 6,624,251 6,976,101 5.31 its products, the third leading commodity group, 37,840,333 36,121,813 (4.54) registered 26.6 million of long tons representing an 27,823,282 31,526,077 13.31 increase of almost 4.8 percent as compared to the Petroleum and Products 25,419,653 26,632,524 4.77 25.4 millions registered during the same period in Manufactures of Iron and Steel 10,220,607 10,628,749 3.99 1999. The above chart shows the major Canal Coal and Coke (excludes petroleum coke) 8,302,752 8,794,940 5.93 commodity flows for the first eleven months period Lumber and Products 8,673,744 8,561,008 (1.30) of FY 1999-2000. Administrator to Attend the World Economic Forum Outreach Efforts

The Panama Canal Administrator, Globalization Backlash, Shaping the As part of its intensified outreach Mr. Alberto Alemán Zubieta, has been Global Corporation, The Second program, the Panama Canal Authority invited to participate in the Annual Phase of the Digital Revolution, and (ACP) participated in the Latin Ports and Meeting 2001 of the World Economic Global Business: Values-Free or Shipping 2000 Conference and Forum in Davos, Switzerland from Values-Driven? Exhibition held in Miami Beach, Florida, January 25 to 30. Mr. Alemán Zubieta will from November 14 through 16. Mr. The annual meeting of the World participate in the Governors Meeting Anthony Garcia, Canal's Customer Economic Forum has emerged as the top for the Transport Services Industry Relations Manager, along with international event bringing together where chief executives of the industry, representatives of the Manzanillo business and political leaders from including couriers, logistics providers, International Terminal Panama, the around the world, along with top posts, ocean shipping and ports, rail, Panama Canal Railway Company, and academic experts, media leaders and air freight and trucking, will discuss the the Interoceanic Region Authority representatives from civil society as key important developments and trends in participated as guest speaker and partners sharing analysis, insights and the industry and explore strategic, panelist in the module Modal Integration experiences to assess the implications of non-competitive issues that affect the in Freight Transport: A Demonstration Of rapid changes in the global economic, industry and society at large. How A Good Intermodal Network Can political and social environment. This For more information regarding Help Leverage Business Opportunities year's meeting will integrate views and the World Economic Forum visit its For Ports And Terminal Operators. leaders from different regions around website at: http://www.weforum.org From January 7-11, Mr. Rodolfo R. key themes, such as: Addressing the Sabonge, the Canal Corporate Planning and Marketing Director, will be participating in the 80th Annual Meeting of the Transportation Research Board to be held in Washington, D.C.. TRB's Canal's Advisory Board will Meet in Panama annual meeting attracts more than 8,000 transportation professionals from all The Panama Canal Authority Traurig; Tommy Thomsen of Maersk over the world as it offers an Advisory Board will meet in Panama Sealand; Andronico Luksic of Luksic unparalleled opportunity to share from February 14 to 16, 2001. The Companies and Michael Barnes of the knowledge and perspectives with meeting will be presided by the Panama-US Business Council have colleagues in the transportation industry Chairman of the Board, Mr. William confirmed their participation. This and gain a better understanding of the O'Neil, Secretary General of the will be the third meeting of the latest developments in the transportation International Maritime Organization Advisory Board since its inauguration research, policy and practice. Mr. (IMO). Ms. Lillian Borrone of the Port in December 1999, and will give the Sabonge has been appointed as a Authority of New York/New Jersey; Board members the opportunity to member of the Task Force on Gerhard Kurz of Hvide Marine Inc.; Y.F. observe firsthand the advancements in Agricultural Transportation representing Chang of Evergreen Marine Corp.; the Panama Canal modernization and the Panama Canal Authority. Phillip Embiricos of Embiricos capacity enhancement program. Shipbrokers; Joe Reeder of Greenberg Telex is History Technological changes in telecom- munications, brought about by the widespread use of fax machines and electronic mail, have prompted the Transportation Symposium Panama Canal Authority (ACP) to eliminate the use of the telex for purposes The Panama Canal Authority (ACP) attended the International Transportation of communicating with shipping lines Symposium held in October in Washington, D. C. Mr. Henry Stec, manager of the and others in the transportation sector. Canal's electronics and telecommunications division, made a presentation regard- The announcement was made by the ing the CTAN system, which is utilized by the ACP to monitor transiting vessels and Canal's Director of Maritime Operations, Canal floating equipment. Mr. Jorge Quijano, at a meeting in early The CTAN is part of the Enhanced Vessel Traffic Management System, a state-of- December with representatives from the the-art system designed to achieve maximum safety and efficiency during Canal Panama Chamber of Shipping. Mr. transits, which provides a method for the integrated management of traffic and transit Quijano noted that telex equipment was resources, incorporating the latest technological advancements in the areas of global only maintained by the ACP at the positioning systems and telecommunications. request of a few in the shipping industry. During the International Transportation Symposium, approximately 1,000 He added that the Canal has not received representatives from 95 countries met to discuss tendencies in transportation in the any telex communications in several new millennium. months. A New Cruise Destination

Government officials and business and a complex for limited recreational Atlantic, with their many historical sites leaders hope cruise ships will soon begin activities. Both Ports of Colon and and attractions. making Panama a port of call. As a lure Cristobal were developed for vessels The cruise industry is growing for the cruise industry, during the month larger than those berthing at the Gatun steadily. There are several investments of October two important cruise Yatch Club. The new ports on the underway in the country to take terminals were inaugurated at the Atlantic offer tourists the opportunity advantage of this fast growing industry Atlantic entrance of the Panama Canal, to visit the Canal plus full-day and to position Panama as one of the the Cristobal Cruise Terminal - Pier 6, excursions, shopping, entertainment, most attractive tourist destinations in the and the Port of Colon. cultural events and, access to Panama . For a long time Panama has wanted City on the Pacific and Colon on the to develop tourism as a major source of revenue. Panama has comparative advantages over other ports in the Caribbean, mainly because it is located outside the hurricane belt; and because it provides the unique experience of two oceans on one port of call. Most cruise lines serving the Alaskan and Caribbean routes already provide transits through the Panama Canal. In 1998 the Panama Canal Authority inaugurated the Gatun Yatch Club on the banks of near the locks at the Atlantic entrance to the Canal. The Gatun Yatch Club offers tourist embarking/disembarking dock facilities

“Norwegian Wind” a Norwegian Cruise Line at Cristobal Cruise Terminal - Pier 6. This 1,750 passengers and 650 crew members Panamax vessel called at Pier 6 for the first time on December 12, 2000. Panama Ports Company (PPC), a member of Hutchison Port Holdings, operates the Port of Cristobal.

for more information Corporate Planning and Marketing A meetingPanama was Canal held Authority with Richardson Lawrie &ACP-CP Associates, P.O. BOX after 025513 they were awarded a Miamicontract FL 33102-5513to develop a forecast We want your comments of Tel.:Canal (507) traffic 272-7961 to be Fax: used (507) for 272-5916the Canal expansione-mail: studies. [email protected] This forecast will be We welcome your comments and suggestions regarding this newsletter. We want to independentweb site: to www.pancanal.com those performed in- convey important news for you and your business. Please let us know your views about this media (format, content, topics) and what you would like to see in our next edition. If you rather receive it electronically, please send us a note with the correct SEE THIS NEWSLETTER ON email address to: [email protected] If you need additional copies or copies THE ACP WEB SITE AT: mailed to other officials within your corporation, please contact us (see box at right www.pancanal.com for address, fax, and telephone numbers). (then click on “Canal News”)