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Sunday, April 21 2019 @ 08:47 PM UTC

CMA CGM Asia-Carib service to bypass Panama Canal

Canal Daily OperationRick Eyerdam - Florida Shipper - French carrier CMA CGM has decided to bypass the Panama Canal on the homebound leg of its PEX2 service linking Asia to the Caribbean in favor of a longer -- but less expensive -- route around Africa's Cape of Good Hope. “Even after we add a tenth vessel of 4,000 TEUs to the PEX2 service, we will save more than $200,000 by returning to Asia by traveling east around Africa,” said Laurent Falguiere, vice president, Caribbean and Latin American Lines at CMA CGM Group, in a telephone interview from the company's headquarters in Marseilles. Asked if he was sending a message to the Panama Canal Authority, which will raise tolls on May 1 by 14 percent -- the second increase in two years -- Falguiere said, “It is not to pressure the Panama Canal Authority. It is a very pragmatic position that we are taking. The primary reason was to look at the costs, and you cannot just ignore these savings.” (more)

The new eastbound rotation includes nine vessels of 4,000 TEUs provided by CMA CGM and one the same size provided by China Shipping Container Lines. The change in direction begins this week from Port of Spain, Trinidad, and sails east to Keelung where it will stop if there is sufficient cargo demand.

“We go by there anyway, so we can stop if there is business," Falguiere said.

The revised rotation continues to Hong Kong, Kaohsiung, Ningbo, Chiwan, Shanghai and Pusan. Then it crosses the Pacific to call at Ensenada, Manzanillo (Mexico), Panama Canal, Manzanillo (Panama), Kingston, Caucedo, Puerto Cabello, Port of Spain, and then east to Africa.

The Port of Manzanillo, Panama, is dropped from the end of the PEX2 rotation before the eastbound leg to Africa.

Falguiere said the PEX2 service has been steadily growing since August, 2006, from eight ships of 2,500 TEUs to the current 10 ships of 4,000 TEUs. He said the ships depart Asia with full loads but return with little cargo by comparison.

“You cannot avoid looking very closely at the accounts,” he said. “Looking at the expense, we are all aware the Panama Canal tolls are too expensive for the trade when you don’t have anything to load."

He said the canal authority charges the same for full or empty ships and the cost of a 4,000-TEU vessel transit is $350,000.

“They need this revenue to pay for expansion but I must look at our own destiny,” Falguiere said.

The authority is well into a $5.25-billion project to add a third vessel lane and new locks to the waterway.

Falguiere said the return voyage requires seven extra days but has two additional benefits.

“It is a sort of around-the-world service that brings a lot of ideas,” he said, such as loading asphalt in Trinidad for Asia. And he said the 10-ship, 70-day rotation provides a “comfortable buffer from an operation side than the buffer we have now.”

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