Panama VS Suez: Alliances Preference?


New alliance service networks for Asia-East Coast North America favour the Panama Canal routeing ahead of the Suez Canal, according to Drewry.

Carriers in the proposed new Ocean Alliance and THE Alliance groups have recently revealed details of their service networks for their April 2017 kick offs. Full port rotations on some trades are still to be announced, and while no vessel deployment or transit time information for any of the routes has been given, we do at least know the full service line-ups for Asia-East Coast North America.

What they reveal is that more carriers are pledging allegiance to the Panama Canal routeing over the Suez Canal option with 12 weekly services planned for the former versus only four confirmed loops for the former. The Suez figure could rise to five if Zim brings back its recently suspended Z7S service.

The traditional benefit of using the Panama Canal was to reduce voyage time between Asia and the US East Coast, when compared to using the route via the Suez Canal or around the Cape of Good Hope. From Hong Kong and South China and from any other point further north, the Panama route is shorter. But in recent years the Suez option grew in popularity as more production in Asia has moved from South China to lower labour costs countries such as Vietnam and Bangladesh (the Suez route is shorter for the Middle East, the Indian Subcontinent and South East Asia) and because, prior to the widening of the Panama Canal, Suez allowed carriers to deploy considerably bigger ships and achieve lower slot costs.

Technical Paper: The Panama Canal Expansion

However, the expansion of the Panama Canal at the end of June has been a game changer. Several Asia-ECNA via Panama loops have been upgraded to deploy ships of 8,000 TEU and above. Following the expansion the average size of ship deployed on the route has increased by 44% to 6,600 TEU.

In time, possibly as soon as April next year, that figure will surpass the size of ships on the Suez route. There are now seven Panama Canal services which contain ships of 8,000 TEU or more with the biggest found on the G6 Alliance’s NYX, which uses 10 x 10,000 TEU units. With fewer Suez services in the network from 2Q17 carriers will be able to go bigger on the new Panama loops, without risking lower ship utilisation.

Daily Email Newsletter

Sign up to our daily email newsletter to receive the latest news from Port Technology International.

Supplier Directory

Be listed with industry leaders operating within Ports and Terminals

Webinar Series

Join 500+ attendees on average with a Port Technology International webinar

Latest Stories

Cookie Policy. This website uses cookies to ensure you get the best experience on our website.