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Panama Canal’s cargo volume falls as cheaper Suez lures clients
Panama Canal authorities expect a 2.4 percent decline in cargo volume crossing the waterway this fiscal year after two major shipping companies rerouted vessels through the Suez Canal, the canal administrator said.
In March, Maersk Line, the world’s largest container shipping company and the Panama Canal’s top customer, announced it would reroute services from Asia to the East Coast of the United States via the Suez Canal.
Though taking 11 days longer, the company says the move saves money as it can nearly double its load on bigger ships.
Adding to the pain, the canal lost out on three potential new services from APL, the container shipping unit of Singapore’s Neptune Orient Lines (NOL).
The company is launching a new service from Asia to the United States’ eastern seaboard in May but has chosen to send three services through Suez, saying it is more profitable.
Nonetheless, three of the six services will go via Panama.
“It’s something we knew was going to happen,” said Jorge Quijano, who heads the semi-autonomous Panama Canal Authority, adding that the canal will lose about $40 million a year in revenue as a result.
Quijano said he expects one company to add a service on the route, although he declined to say which one.
Carrying about 5 percent of world trade, the Panama Canal is undergoing a $5.25 billion expansion, which will open six months later than planned in mid-2015.
A larger third lane will fit ships 1,200 feet (365 meters) long and 50 feet (15 meters) deep and carrying nearly three times as many containers. (Reuters)
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