US East to Pinch 10% of Panama Traffic

Thursday, June 18 2015 @ 09:31 am EDT

Contributed by: Don Winner

A new study by C.H. Robinson Worldwide Inc has said that the US East Coast could take as much as 10% of Asian originating cargo from the US West Coast after the opening of the expanded Panama Canal, according to the Wall Street Journal.

The Panama Canal expansion is due to be completed in early 2016 after overcoming various setbacks.

Once opened, carriers coming to the US from China have the option to bypass the US West Coast, which has suffered from ongoing congestion, and head straight to the East, which could see ports in the region benefiting dramatically.

A number of transhipment hubs in the Central American and Caribbean regions are also set to see big growth due to the larger ships traversing the canal.

The cost of expanding the canal is now well over US$5 billion and promises to redefine the global logistics landscape.

However, the century-old Panama Canal faces competition from old rival the Suez Canal, which is also undergoing a ‘two-lane’ expansion that will see ships able to pass each other along the canal as opposed to having to wait for their turn to pass in single file thus doubling speeds, which is due to open before the Panama expansion.

Furthermore, Panama also faces new competition from the incredibly ambitious Nicaragua Canal project.

Funded by the Hong Kong Nicaragua Development Group, the project aims to drill through Nicaragua and have a fully functioning canal by 2020 that can accept even bigger ships than Panama.

However, the viability of the project has been questioned intensely. (Port Technology)

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