Carriers choose Panama over Suez on Asia-US east coast trade routes
THE Ocean Alliance and THE Alliance that plan to launch in April will operate 12 weekly services between Asia and the US east coast via the expanded Panama Canal compared with only four confirmed loops via the Suez Canal, according to Drewry Shipping Consultants.
The traditional benefit of transiting the Panama Canal was to reduce voyage time between Asia and the US east coast when compared with sailing via the Suez Canal or around the Cape of Good Hope, reported IHS Media.
However, in recent years, the Suez option became more popular as production moved from south China to Vietnam and Bangladesh - the Egyptian route is shorter for the Middle East, the Indian subcontinent, and Southeast Asia - and because the Suez Canal allowed carriers to deploy significantly larger ships and achieve lower slot costs prior to the widening of the Panama Canal.
The opening of the enlarged Panama Canal at the end of June became a "game changer" with the average size of ship transiting the waterway rising by 45 per cent to 6,600 TEU as several Asia-east coast North America services are operated by 8,000 TEU vessels.
The average size of ships transiting the Panama Canal is expected to surpass the 8,000 TEU Suez average as soon as April, according to Drewry.
There are currently seven Panama Canal services operated by vessels of 8,000 TEU or more with the G6 Alliance's NYX service deploying ten 10,000 TEU ships. With fewer Suez services from the second quarter of 2017, carriers "will be able to go bigger on the new Panama loops, without risking lower ship utilisation."
Despite the rising popularity of the Panama Canal, shippers are not going to abandon the west coast option, Drewry notes. Traffic on the Asia-US west coast route rose marginally faster at 1.4 per cent in the first 10 months of the year, compared with 1.1 per cent on the east coast route.
THE Ocean Alliance and THE Alliance that plan to launch in April will operate 12 weekly services between Asia and the US east coast via the expanded Panama Canal compared with only four confirmed loops via the Suez Canal, according to Drewry Shipping Consultants.
The traditional benefit of transiting the Panama Canal was to reduce voyage time between Asia and the US east coast when compared with sailing via the Suez Canal or around the Cape of Good Hope, reported IHS Media.
However, in recent years, the Suez option became more popular as production moved from south China to Vietnam and Bangladesh - the Egyptian route is shorter for the Middle East, the Indian subcontinent, and Southeast Asia - and because the Suez Canal allowed carriers to deploy significantly larger ships and achieve lower slot costs prior to the widening of the Panama Canal.
The opening of the enlarged Panama Canal at the end of June became a "game changer" with the average size of ship transiting the waterway rising by 45 per cent to 6,600 TEU as several Asia-east coast North America services are operated by 8,000 TEU vessels.
The average size of ships transiting the Panama Canal is expected to surpass the 8,000 TEU Suez average as soon as April, according to Drewry.
There are currently seven Panama Canal services operated by vessels of 8,000 TEU or more with the G6 Alliance's NYX service deploying ten 10,000 TEU ships. With fewer Suez services from the second quarter of 2017, carriers "will be able to go bigger on the new Panama loops, without risking lower ship utilisation."
Despite the rising popularity of the Panama Canal, shippers are not going to abandon the west coast option, Drewry notes. Traffic on the Asia-US west coast route rose marginally faster at 1.4 per cent in the first 10 months of the year, compared with 1.1 per cent on the east coast route.