Panama Canal delay will benefit Suez

The further postponement to the opening of the Panama Canal’s enlarged locks from mid-2015 to end 2015 will be welcomed by the Suez Canal Authority which has already persuaded several ocean carriers operating between Asia/East Coast North America (ECNA) to change allegiance this year and now has more time to persuade others to follow suit.

The Panama Canal Authority (ACP) will be further worried about the continuing reluctance of North American importers to switch traffic away from the West Coast to the East Coast because, as already demonstrated, the only significant change to date has been the transfer of existing East Coast business from the Panama Canal to the Suez Canal.

The reasons for this are many, varied and complex but relate to the fact that eastbound transit times are much faster via the West Coast. For example, China to Los Angeles/Long Beach can be done between 10 days and 15 days, whereas US East Coast ports are often only reached after 30 days, on top of which there is a freight rate differential of just under US$1,500/40ft.