The widening of the Panama Canal, scheduled for completion in 2014, will increase capacity and in turn the importance of Caribbean transhipment hubs like Kingston Jamaica. The Suez services are already competitive, handling the larger boxships. With a shift in trade to emerging manufacturers like Vietnam and Indonesia, will Suez traffic provide the real boost to the Caribbean hubs?By Paul Richardson, AJOTA number of factors are governing the development of the North/South trade potential covering the North America/Latin America route, none the least the emergence of Caribbean transhipment over ports such as Kingston, and the recently announced long term investment by CMA-CGM in the new Gordon Cay Container Terminal. CMA CGM has signed a Memorandum of Understanding (MOU) for a minimum period of 35 years, and marks the start of a major investment programme in the terminal before it is fully commissioned in 2015. It also comes at a time when the widening of the Panama Canal, which effectively will mean that the term “Panamax” vessel which now tops out at around 5,000 teu capacity, will increase to some 12,500 teu capacity. With the expansion program, the new terminal will become the only container handling facility in the Caribbean capable of handling vessels of this size. Under the MOU, the plan is that CMA CGM will take over operations at the current facilities, and expand the 1,300m long quay planned under Phase 1 development for the new terminal, to 1,700m in length, and ensure a draft capability of 17m to accommodate vessels of the new “Panamax” restrictions. Such investment and the increase importance of ports such as Kingston, underlines the significance of how transhipment ports are fast emerging as the major conduits for the East/West global trade to cover the North/South routes. Panama Canal parameter versus Suez system But the Kingston example is part of a complex product that centres on the big Asia market potential, and where exactly does it lie, and how long is the widening of the Panama Canal access routes overdue? Geographically, ports in the Caribbean location are ideally located to cover market growth and capacity flowing through the Panama Canal. In a move that that upgrade the present capacity parameter of a Panamax vessel from around 5,000 teu to more than double that, the planned widening of the access to the Panama Canal will not be completed until 2014 at the earliest. But the alternative for lines to cover East/West routes serving the Latin America and US East coast trades is the Suez Canal. The Suez transit for lines serving the Latin America/US East coast trades has been handling vessels of over 8,000-teu capacity for several years, and the levels are rising. Latest figures available from UK-based PR News Service ComPort database show that capacity on the Asia/US East coast trade has risen only around 4.3% in the last 12 months, but capacity on services using the Suez Canal has jumped considerably. Back in September 2010, there was around 28,000 teu of total weekly capacity using the Asia/USEC Suez Canal transit. Exactly, one year latest that figure has grown to well over 39,000 teu, and by comparison with the capacity restricted Panama Canal route, the latest Suez figure is makes a mockery of the time-consuming, high cost Panama widening program. On top of this, location of trade source obviously remains of significant important, and there are split views on this. For lines to cover the Asia/US East coast and Latin America trades via the Panama Canal, nine vessels can operate on a slow steaming basis to provide a 63 day round voyage schedule. The same lines can operate through the Panama Canal with nine vessels providing an identical round voyage schedule. According to sources in both the Panama Canal and Suez Canal facilities, the cost to a shipping of one transit works out at around US$1m – so no difference there. But the big difference comes in on market source, and geographical location. Li