The Panama Canal this month regained the majority share in terms of overall container transport capacity on all-water routes between the Far East and the US East Coast, according to Alphaliner.
Following the completion of the USD 5.25 billion expansion project in late June, the Panama Canal has successfully pushed back the Suez Canal’s incursion into this trade.
Now that the old Panama locks’ restrictions have been lifted, the canal is making a strong comeback, regaining much of the all-water market share that was lost to the Suez Canal.
The overall all-water weekly capacity stands at 145,600 TEU as at July 2016, for a year-on-year growth of 1.7%. After the launch of the new locks, the Panama Canal’s share of the trade now reaches 57%, compared to 48% at the start of this year.
It is expected to increase further over the coming months, as some carriers have yet to up-size their Panama services with Neopanamax and LCS tonnage, while also shifting some of their current trans-Suez services to Panama.
In the past few years the route via Egypt had grabbed a substantial market share of Far East – USEC services, as economies of scale and vessel cascading led carriers to deploy 5,500-10,000 TEU ships via the Suez Canal, rather than continuing with classic Panamax units of 4,000-5,000 TEU on the shorter Panama route, Alphaliner said.
Despite the increased distances for some China – USEC port pairs, the Suez route made economic sense, as the scale advantages of lager vessels often outweighed the disadvantages of the longer steaming distance.