14 Aug Will Panama Canal Restrictions Impact Shoe Companies?
Steve Madden Ltd., Wolverine World Wide Inc., and Columbia Sportswear are among the footwear and apparel companies insiders say may be impacted by draft restrictions for vessels utilizing the Panama Canal.
In order to mitigate the impact of the El Niño phenomenon, the Panama Canal Authority’s (ACP) said, effective Sept. 8, it will enact “temporary and preventative” measures to restrict the of draft — or depth — for all shipping agents utilizing the canal.
El Niño, the ACP says, has triggered a drought in the Canal Watershed, causing the water levels of Gatun and Alhajuela Lakes to fall substantially below their average for this time of year.
Citi Research analyst Kate McShane said she “believes a meaningful shift of freight back to the West Coast is possible — at least temporarily — as a result of the new restrictions.”
“It’s likely that container ships in route to East Coast ports from Asia will be more greatly impacted given their average size near the Canal’s maximum depth,” McShane wrote on Aug. 12. “The last time the Canal restricted draft depth in 1998, the growth rate of inbound loaded containers at [Los Angeles and Long Beach ports] more than tripled from the run rate of the previous eight months and an elevated level of growth persisted for three months.”