maersk line panama canal container shipping

Maersk Line “M”-type ship transiting the Panama Canal. Image (c) Maersk Line

(Bloomberg) — Maersk Line, the world’s biggest container shipping company, will stop plying through the Panama Canal to move goods from Asia to the U.S. east coast as bigger ships help the company move it profitably through Suez Canal.

Maersk Line will send vessels through Suez Canal 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 of Maersk Line, said in Singapore today. The last sailing through Panama will be on April 7 and the first service through Suez will be a week later, the company said in an e-mail statement.

“The economics are much, much better via the Suez Canal simply because you have half the number of ships,” Skou said. “One of the reasons for why this is happening now is that the cost for passing through the Panama Canal has gone up. At the end of the day, it comes down to cost.”

Shipping lines, including Maersk Line and Neptune Orient Lines Ltd., have cut costs, reduced speed of their fleet and sold some vessels to contend with freight rates that are below break-even levels. Maersk Line, based in Copenhagen, has said pressure on charges will remain this year.

Fees for ships to go through the Panama Canal have tripled in the past five years to $450,000 per passage for a vessel carrying 4,500 containers, Skou said. The distance from China to the U.S. east coast via the Suez Canal is about 4 percent to 5 percent more, he said.

A $5.25 billion expansion of Panama Canal, the waterway handling 5 percent of global trade, will open by June 2015, six months later than originally planned. The canal connects the Atlantic and Pacific oceans and is used by as many as 14,000 vessels a year.

Whether Maersk will use the Panama Canal after the expansion will depend on the economics, Skou said.

- Kyunghee Park, Copyright 2013 Bloomberg.

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  • Ryan

    Maersk abandons Panama because the toll of $450k for a 4,500 TEU vessel is too high. Fair enough. But what is the toll for an equivalent vessel, or even a 9,000 TEU vessel, at Suez? If the article is about the economics of the two canals, it should supply the numbers.

  • Scylla

    Agree that the Suez costs need to be shown for comparison plus the much increased hull, P&I and cargo insurance costs of transiting the ‘High Risk Area’ of the western Indian Ocean and any costs for the hire of armed guards – none of which apply to a Pacific transit. Lets have the full picture.

  • Ben Hedges

    Negotiating ploy on the part of Maersk, given the delays involved with the Suez. Maersk’s on time percentages would go down with such a move and isn’t Maersk now supposedly putting a major emphasis improvement in that area. Maersk likes to see itself as the voice of the industry and they like to pound on the table.

    • John Louis

      Correct! The idea is to force down the price of the toll. Thus, other major carriers will also rule on the toll decrease this cost.

  • InventingJoy

    I have a method of preventing pirates off the coast of Africa, from boarding ships. Cheap, simple, no firearms. Also planes. Contact me if you want to work something out re implementing it. InventingJoy caringpro@yahoo.com

  • Curtis Davlut

    Maersk have lost touch with their most important asset….the customers. It is felt that the increase in costs, reduction in services and the attitude that “we are of the largest so we will be heard when we bark”is of the past. They need to get into the game, get connected with the vendors and get competitive in all aspects. Point and case, biggest is not the best.

  • Curtis Davlut

    try getting a hold of some one at Maersk, just for the heck of it.I had my entire team send a e-mail to there web site contacts page 2 months ago, not a single response from them. We move approximately 250 cans per month- maybe we are to small of a user for them to want to do business with us? Go ahead try for yourself.Ease of use, its what its all about these days- Maersk wake up……

  • Mark Taylor

    This sounds like a good plan for Maersk, but maybe not for the customers in the long run. But what about Captain Jack Sparrow and all his mates that hang around that area looking for slow moving ships to take and hold for ransom. Surely this is going to cost Maersk alot of money to protect their vessels. Hired security doesnt come cheap.

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