[141014.EN.BIZ] Is Too Little Too Late For Expanded Panama Canal With Advent of Mega Ships?

THE 2016 expanded the Panama Canal will once again change shipping patterns - as it did when it opened in 1914 - but its impact may be limited, says Maritime Executive magazine of Fort Lauderdale.

The waterway's game-changing role, said the report, has been eclipsed by parallel developments in ship sizes that makes even the new and expanded Panama Canal obsolete to the fastest growing segment of container shipping - the mega ship.

"The new mega-containerships of 14,000 to 22,000 TEU must go elsewhere," said the report.

"Big players are all building ultra large container vessels (ULCV) ranging from 14,000 - 19,000 TEU for the Asia-US and Asia-Europe trades - too big to fit through the new canal," said the article.

While suggesting an Arctic mega ships take an Arctic "shortcut", through which no one but most deluded greenie thinks feasible, the Maritime Executive makes no mention the obvious alternative - the Suez Canal that already rivals Panama, transitting vast volumes of Americas-bound Asian cargo.

Said Maritime Executive: "The new Panama Canal will be able to accommodate 12,500-TEU ships. When the canal opens, trade lanes will change and cargoes are expected to double. Big winners are expected to be ports on the Gulf and east coasts."

This was to sound the death knell of west coast ports - indeed the Port of Savannah made it a point on Asian marketing tours of saying "keep it on the water" in a free floating warehouse.

"Shipping experts say it's 30 per cent cheaper to bypass west coast ports in favour of transitting the canal and discharging cargo at east and Gulf Coast ports," said the article.

"But ports along the west coast are not worried. They can already accommodate 14,000-TEU ships that are too big for the canal and will soon be able to handle ships drafting 50 feet or more," it said.

"The demise of west coast ports has been greatly exaggerated," Port of LA spokesman Philip Sanfield told Maritime Executive. "We have adapted to the challenges presented by the Panama Canal and by investing in our port and forging business relationships around the globe."

Also nonchalant, Long Beach spokesman Lee Peterson said: "Long Beach has already handled 14,000-TEU ships. In 2015, the Middle Harbour will be able to handle 18,000-TEU ships. Shippers can easily reach any market in the US."

But Maritime Executive also makes no mention of the preferred destination of the cargo. While California is a big market, its hinterland is those sparsely populated rural states of mountains, prairies and deserts.

East of the Chicago-Dallas line is where cargo wants to go - without California screaming fusspots and badlands filled - with litigious greenies lying in ambush all the way to every retail shelf thousands of miles to the east.

No "keep it on the water", east coast ports say. Just 200 nautical miles through low-sulphur fuel and save-the-whale zones, and a short road and rail journey to where your cargo really wants to go through consumer rich hinterland.

Bring it through Panama, or Suez, and avoid the transcontinental road and rail expense where over-the-road drivers are in short supply as the regulatory jungle enroaches on their dying way of life.

Source : HKSG, 14.10.14.