The impacts of new shipping routes/ passages : a study on the impact of the expansion of the Panama Canal on various shipping sectors

• Main Author: Ong, Randolph Jian Jie
• Other Authors: School of Civil and Environmental Engineering
• Format: Final Year Project
• Language: English
• Published: 2017
• Subjects: DRNTU::Engineering::Maritime studies
• Online Access: http://hdl.handle.net/10356/70843
• Institution: Nanyang Technological University

Since the Panama canal first opened in 1914, the number of vessels transiting between the Pacific and Atlantic Oceans has been increasing over the years. In order to cope with the increasing demand as well as the competition from other transportation alternatives such as the rail-land bridge, the Panama Canal begin its expansion plan. The expanded Panama Canal started its operation in June 2016 and one of the main changes was the addition of the new larger locks. The new locks are capable of allowing significantly large vessels to transit. With the expansion, it is expected that the maritime sector will experience a ripple effect, especially in the container trade. This study aims to examine the impact of the expansion by using published statistics, surveys and interviews among some of the major players from the maritime sector. One of the most evident impact is the cascading effect on the Panamax containership. As container carriers seek to deploy larger vessels to lower slot costs, there has been no tangible increase in volume experienced on the US East Coast ports. Freight rates for shipments from Asia to East Coast has also became costlier than the West Coast. Even though some Suez services were routed to Panama, there is little to no effect on ports located in Southeast Asia. However, if demand growth increases up to 5-8%, the situation could have been reversed. Apart from the LNG market, the expansion has little to no impact on the main bulk of the dry and liquid bulk sector.