The competition between the Suez and Panama canals are more likely to benefit big boxships than tankers, Bimco has stated.
Despite the demand from the tanker sector, the recently announced expansion of the Suez Canal will be unable to accommodate fully laden VLCCs.
Chief shipping analyst at Bimco, Peter Sand, said: “The world has two giant canals in operation that are competing for the container shipping market handling imports into the US East Coast from the Far East. As the Panama Canal expansion gets nearer its completion, the Suez canal starts to feel the heat and pressure to retain its superiority in handling the biggest ships in the World”.
Post-panamax ships already call at the US East coast via the Suez Canal, taking advantage of the seven day saving in voyage time. As the container market strives for efficiency, the building of ever-larger ships could see a cascading effect bring more substantial tonnage the trade.
“Suez will lose its exclusivity in large containership transits soon.. A way to retain an edge in the market will be to improve your product. With Panama holding the upside on sailing distance by a small margin, the key parameters left will be fast transits and a competitive pricing of the service provided. In addition to that, the development of a larger transhipment hub to serve the East-Mediterranean and Black Sea market could increase the attractiveness of the Canal,” added Sand.