Historic canal developments

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The world is most likely to witnessthree historic canal developments: doubling of Panama's capacity; construction ofa rival Atlantic-Pacific canal across Nicaragua; and thenew Suez canal turning much of the original into a two-lane marine highway. Panama is facinga number of challenges:

  1. Win more traffic from the rival Suez Canal.Suez is a sea-level canal with no locks or pinch-points.
  2. Relocation of some manufacturing fromChina to more southeasterly parts of Asia, closer to the Suez route.
  3. Technicalproblems with dodgy cement and machinery at the new locks
  4. The Nicaraguan government endorsed the route for a 278-km(173-mile) potentially sea-level (and therefore lock-free) canal connecting the Pacific to the Atlantic using the Brito River, Lake Nicaragua andrivers on the Atlantic side.
  5. Shipping containers from Shanghai to New York takes 26 days via Panama, versus 28 days using Suez.The firm with the biggest ships, A.P. Moeller-Maersk, has stopped sailing via Panama, and now uses Suez instead.

- See more at:http://www.economist.com/blogs/economist-explains/2014/08/economist-explains-9

2 Comments

  1. Container shipping lines are shifting more of their all-water services from Asia to the U.S. East Coast to the Suez Canal route, instead of sailing through the Panama Canal, to take advantage of lower slot costs they can realize on the big post-Panamax ships they are cascading onto the route from the Asia-Europe trade. "Maersk Line will send through Suez Canal a vessel that can carry as many as 9,000 20-foot boxes at a time, instead of using two 4,500-box-vessels through Panama Canal", Soeren Skou, chief executive officer said. “The economics are much, much better via the Suez Canal simply because you have half the number of ships,” Skou said. http://www.bloomberg.com/news/2013-03-11/maersk-line-to-dump-panama-canal-for-suez-as-ships-get-bigger.html Rising tolls and economies of scale have pushed lines that service Asia to the US east coast to choose the Suez route. http://www.tradewindsnews.com/weekly/342068/Suez-overtakes-Panama-Canal-on-key-container-route

  2. I am curious to know how Suez is a competitor? I think Suez have traffic mostly from the East Asia?