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Maersk Dumps Panama Canal Route

by Ulrika Lomas, Tax-News.com, Brussels

13 March 2013


Maersk Line is to cease operating through the Panama Canal for shipments transiting between Asia and the United States' east coast and will instead utilize the Suez Canal route with larger carriers to slash costs.

The decision, which is expected to be mirrored by other large shipping lines, will mean a change in fortunes for the Suez Canal, which saw a double-digit fall in traffic last year while Panama posted gains.

The announcement could be highly damaging for the Panama Canal Authority, which has poured several billion dollars into its largest ever expansion project to double the canal's capacity to allow for the passage of longer, wide vessels.

According to Maersk, Panama Canal tolls have reached an untenable level and despite recent fee hikes planned for May by the Suez Canal Authority it has become the most profitable alternative.

The Suez Canal Authority in February confirmed hikes to its tolls from May 1, 2013, of between 3-5% depending on tonnage and ship type, in addition to a 3% increase brought about in March 2012.

Maersk is expected to take delivery of the world's first Triple-E Mega ship in June, with the capacity to transport 18,000 Ten-foot Equivalent Units. The vessels - which will not yet be able to transit through the Panama Canal - will emit 50% less CO2 per container moved than the industry and secure significant fuel cost savings, complemented by the increased adoption of slow steaming practices.

TAGS: marine

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