THE PANAMA CANAL IS RUNNING OUT OF WATER

Global warming is affecting shipping through the Panama Canal, delaying US imports of everything from new cars to fuel. 

Every ship traversing the canal between the Atlantic and Pacific oceans requires 50 million gallons of fresh water, drawn from two man-made lakes in the middle of the isthmus.  But reduced rainfall there this year has made water levels in the lakes drop precipitously, meaning less water to feed the canal, let alone provide fresh water to the locals.

That’s led to a 200-ship wait on both sides of the canal, delaying passage of goods.  And the ships that are being allowed through, some booked a year in advance, can carry less cargo because their draught (how deep the ships ride in the water) has been reduced from 50 feet depth to just 44 feet.  That reduces the through-put as each ship can each carry less cargo.

Huge “neopanamax” vessels (140 feet long and 180 feet wide) usually draw 60 feet in depth, so their cargos also have been reduced.  As a result, some of these mega-ships that carry liquified propane or butane (or up to 13,000 shipping containers) are having to divert all the way around South America or circumnavigating the globe the long way via the Suez canal, adding to fuel prices in the US.

Even smaller ships are facing delays as traffic in the canal is now limited to 32 crossings per day from the usual 36.  To monetize the supply-demand imbalance some shippers are bidding on auctions to prioritize their vessels.  While a usual Panama crossing might cost shippers $400,000 per trip, a few shippers are paying as much as $600,000.

All of which means more expensive prices for imports in the US where 73% of the cargo (worth $270 billion annually) is headed, including to ports like Port Elizabeth in NYC’s harbor.

One beneficiary of these delays may be the Trans-Panama Railway (which pre-dates the canal and is now co-owned by the Canadian Pacific – Kansas City RR).  Ships that can’t wait for the canal can offload their cargo on one side of the isthmus, put it on trains that make the 47-mile journey and load it on another ship on the other side to complete its journey.  If improved, the railway could carry up to 1.4 million containers annually.

To alleviate the canal’s water problems the Panamanians have hired the US Army Corps of Engineers (builders of the original canal) for a $10 billion contract to divert water from inland rivers into the man-made lakes feeding the canal’s operations.  But this will be a ten-year project.

So after a COVID-era nightmare of shipping delays at US ports like Long Beach CA (which led to many carriers using the Panama Canal to go directly to east-coast US ports), import delays will persist.  But this time it’s not due to high US demand for imports but global warming’s effect on rainfall in the jungles of Panama.

 

 

MTA TO COMMUTERS: GET BACK TO WORK!

Metro-North is telling part-time commuters to go back to work.  Their incentive?  Elimination of the 20 trip discount tickets introduced in 2022.

After the pandemic when daily commuters were reverting to two or three days a week in the office, the old monthly pass didn’t make economic sense.  So MTA introduced a 20 trip ticket (good for 60 days) offering a 20% discount over daily fares.  It proved very popular.

Investment manager John Sini from Darien says he loved the idea.  “I currently commute 3 – 4 times a week (to GCT) and a 20 trip ticket would last me 2-3 weeks.”

Here's a chart showing the ticketing options for a Darien commuter on Metro-North:

TICKET TYPE	COST	DISCOUNT
One Way – Peak	$ 15.25	None
One Way – Off Peak	$ 11.50	25%
10 Trip – Peak	$ 152.50	None
10 Trip – Off Peak	$ 97.75	15%
20 Trip – Peak	$ 244.00	20%
Weekly	$ 107.25	30%
Monthly	$ 301.50	50%

 

The unlimited monthly ticket only makes sense if you take at least 27 trips a month.  For many in the work-from-home crowd this isn’t their new reality.

If all of this is confusing, MTA does have a cool online fare calculator (https://fares.mta.info/) showing your lowest price option based on your travel patterns.  Plug in your stations, number of trips each month, peak and off-peak, and it recommends the “best” kind of ticket to buy.

Why is MTA killing the 20-trip ticket?  They say it’s because “post-COVID travel patterns continue to return to normal.”  But that’s obviously not what’s happening.

Ridership on Metro-North has flatlined at 70% of pre-COVID numbers for over a year now.  Efforts by employers to force their workers back into the office are still not working.  People prefer to not commute if they can.

The MTA’s claim of “a return to normal” also runs counter to what the CDOT is about to do in reducing service on the least-traveled days, Mondays and Fridays.  That decision is already baked into the new state budget but details are pending.

When I asked CDOT to comment on this apparent contradiction I never got a reply.  Even though CDOT sets fares in Connecticut, they’re clearly not in synch with Metro-North.  So think of this new move by Metro-North (effective Sunday August 20^th along with fare hikes on the subways and buses in NYC) as a not-so hidden fare increase.

When the 20 trip tickets were introduced in 2022 they were a “carrot”.  Now Metro-North is going with a “stick”.

Higher fares won’t incentivize the work-from-home crowd back to the train. They may actually do the opposite.  As commuter Sini says,   “I think the MTA’s decision (to eliminate the 20 trip ticket) is a short sighted fare policy mistake that will drive some commuters that have in-office flexibility to commute less frequently.”

Workers now have a stronger argument with their bosses that they’ll be more productive (as well as saving time, stress and money) by not commuting.

 

 

NEW RAIL CARS FOR CONNECTICUT

Finally, some good news for rail commuters in Connecticut:  CDOT has ordered 60 new railcars for service on the branch lines.

To be manufactured by French rail giant Alstom (the folks who built the TGV and are building the new generation of Acela for Amtrak), these new unpowered cars will bring welcome enhancements for riders.

THE CARS:  The new cars will offer two-by-two seating (vs three by two seating on the M8s), some with work-station tables.  There will be overhead luggage racks and the capability of onboard Wi-Fi (which CDOT promises will be installed).  There will be USB plugs, automated station announcements, automatic doors and full ADA access.  And there will be bicycle racks.

But given the spacious seating, the new coaches will have 20% fewer seats per car than the M8s.

WHERE WILL THEY RUN?   They will mostly serve the Hartford Line between New Haven and Springfield, replacing ex-Shore Line East coaches built by Bombardier and Mafersa.  Even older coaches, rehabilitated on a lease from MBTA, will be returned to Boston.

Currently CT Rail runs locomotive-pulled three to five coach trains (supplemented by Amtrak’s two-coach consists) on The Hartford Line.

The new cars are capable of running at 125 mph but the tracks between New Haven and Springfield are only rated for 110 mph in short stretches.  Speed limits on the Danbury and Waterbury branches (where the new coaches may also run) are much lower.  The new cars will not run on the mainline, the New Canaan branch or Shore Line East, which are all electrified and operate with M8 cars.

MANUFACTURING:          The Alstom cars will be built in Sahagun, Mexico.  Because they are being purchased with state money there is no “buy American” requirement.

Alstom has extensive experience building rail cars elsewhere in the world. But these new cars will have to be built stronger (and heavier) to meet Federal Railroad Administration standards for “buff strength” and fire resistance in case of a crash.

Alstom tells me the first cars in the order will arrive “sometime in 2026”.

THE COST:            Given the $315 million purchase price for the 60 new cars, that works out to $5.25 million each.  The last M8 order from Kawaski in 2016 (for self-propelled EMU cars) came in at $3.85 million each. The new Alstom coaches will require dual-mode (diesel & electric) locomotives being purchased separately.

CDOT also has an option to buy an additional 313 Alstom coaches.  The current M8 fleet is over 500 cars, the first of which were ordered in 2006 but not put into service until 2011 due to software issues during testing.

THE BOTTOM LINE:        The branch lines have long needed new cars, but ridership there is historically lower than on the mainline (New Haven to Grand Central).  And with post-COVID ridership still no better than 70%, fewer seats makes sense (for now).  Obviously CDOT hopes these sleek, roomy new cars will attract new riders, but only time will tell.

UNION POWER

In perhaps no other industry than transportation does organized labor have so much power.  And those unions are getting aggressive in their demands.

The 340,000 members of the Teamsters that work for UPS are now voting on a new contract giving them better wages and working conditions.  Under the proposal those big brown delivery trucks would finally get air conditioning, essential in such a strenuous job and an era of global warming.

Less lucky were the 22,000 Teamsters who worked for 99 year old Yellow Trucking. That firm has gone bankrupt, the victim not of union demands but debts the company built up over a 20 year acquisition effort as it gobbled up smaller trucking firms.  The drivers who lost their jobs may find work but it may not be in union companies.

That friendly Amazon driver who delivers your packages?  He’s neither a union member nor an Amazon employee, despite what his uniform and truck may say.  Amazon outsources its “last-mile deliveries” to third-party companies paying drivers about $19 an hour vs the $49 an hour senior UPS drivers can earn.  Given its recent victory at UPS, it’s thought the Teamsters may next target Amazon to organize.

And then, there’s Metro-North…

The railroad has dozens of unions representing its 5000 employees but it’s the 600+ member Transport Workers Union that is warning us of a possible strike.  The union, which represents car inspectors, coach cleaners and mechanics has been without a contract since 2019 and says MTA management is dragging its heels on a new contract.

The union has entered mediation through the Railroad Labor Act but says the first round did not go well.  Under New York State law the union does have the right to strike and that would pretty much halt train service.  But the effect of that might be far less in these post-COVID times as we’ve all learned how to WFH (work from home).

This labor unrest comes as the MTA admits it paid $1.3 billion in overtime last year.  About 1100 of its employees doubled their salaries with OT.  There are mechanics and MTA cops taking home over $300,000 due to extra duty.  Under their contracts, available overtime must first be offered to the most senior (and highest paid) staffers so those veterans, closest to retirement, are raking it in.

Speaking of retirement, CDOT admits it is still understaffed by about 200 badly-needed employees after a wave of long-anticipated retirements of senior staffers.  This comes just as a gusher of infrastructure money is coming our way, which needs engineers and planners to implement. 

The problem is the agency can’t recruit new engineers and mechanics as it’s competing against major employers in the state like General Dynamics’ Electric Boat.  Even if CDOT can find a new person, “archaic hiring rules” at the Department of Administrative Services mean that person must wait seven to 13 months to get them on the job and on the payroll.  Who’s going to do that… wait a year to take a lower-paying job?