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Panama Canal suffers withdrawal symptoms
Evergreen’s rerouting will result in lost revenue for ACP

Panama Canal suffers withdrawal symptoms

The Panama Canal has lost its competitiveness for Maersk Line and Evergreen which have, during recent months, redirected their services via the Suez Canal.

Jorge Quijano, Administrator of the Panama Canal Authority (ACP), said that following its incorporation into CKYHE alliance, Evergreen had replaced its 4,000 teu capacity vessels with vessels of up to 8,000 or 9,000 teu capacity with the result that with effect from May this year (2014), the service would no longer use the waterway.

A year ago (May 2013), Maersk Line redirected its TP 7 service via Panama to Suez using larger vessels to achieve economies of scale. This meant a reduction of 104 Canal transits representing approximately US$44m less toll revenue for the ACP; it is believed that the Evergreen rerouting will have a similar result.

Quijano has said that he expects most Asia to US East Coast direct services will not be using the Canal until the first quarter of 2016 when the expansion is open for business. “We still have services from Asia to the US East Coast but they make other stops and therefore don’t necessarily go direct,” he said.

“Until the Panama Canal expansion is finished and we can receive post-Panamax vessels (we) are competing at a disadvantage with Suez as they are able accommodate such ships,” he added.

With regard to the date the fees for the new locks tolls will be announced, Quijano said that due to the conflict with Grup Unidos por el Canal (GUPC), the announcement has been delayed but, “we hope to make it available from September to October 2014”.

Meanwhile, GUPC has told ACP that by July 2015 it expects to have the two locks (Pacific and Atlantic) for the expanded Canal filled with water.