Suez vs Panama – which is used more?

Should the Panama Canal be worried, as carriers increasingly switch the routing of their Asian services to the longer Suez Canal route? This question was posed by Drewry Maritime Research in its weekly Container Insight Report.

The maritime analyst notes that the trend towards more Asia-US East Coast container services via the Suez Canal route and fewer via the traditional Panama Canal route is accelerating.

Based on Drewry’s proprietary database of container services, another two Panama weekly services between Asia and the US East Coast have gone in the past year and been replaced by an additional Suez loop. “

Counted in number of loops, only 62% of services in this trade lane now use the Panama Canal route. During the forthcoming winter season, when the G6 alliance merges its NCE and SCE Panama Canal services into just one loop, the proportion is expected to fall again to 60%,” says Drewry.

Another reason for the switch of carrier strategy is that substantially larger ships can be deployed on the Suez route. According to Drewry, the average size of ships on the Suez route is about 7 500 TEUs, whereas on the Panama Canal route the average is about  4 500 TEUs due to the Panama Canal’s current maximum size limit of about 5 000 TEUs.

This raises the question: will the services go back to the Panama Canal route once the enlarged locks are completed and enable vessels of up to 13 000 TEUs to transit the Panama Canal?

According to Drewry, once the enlarged Panama Canal is open in 2016, Asia-US East Coast services (other than those from South East Asia) will probably revert to the Panama Canal route, provided its new canal tolls (yet to be announced) are reasonable.