High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
The world’s largest container shipping company has welcomed the arrival of the expanded Panama Canal announcing it will likely add capacity and reroute larger vessels to make use of the new locks.
With the opening of the expansion this past Sunday, Maersk Line, as one of the Panama Canal’s largest customers, said it is likely to take advantage of the expanded Panama Canal and reroute one or more services.
The expansion of the Panama Canal will double the waterway’s capacity and allow the passage of so-called Neopanamax, or New Panamax, vessels with a capacity of up to 14,000 TEU.
Maersk Line says that in 2016 it expects to perform more than 400 vessel transits through the Panama Canal for a combined 400,000 TEU and more than $100 million in estimated Canal fees. In 2015, Maersk Line made 313 transits and paid $80 million in fees.
“As a long-time customer, Maersk Line welcomes the expansion of the Panama Canal. We look forward to seeing our larger vessels pass through the new locks. It is a very positive development for trade, Panama and the region, and of course the shipping lines that transit this important corridor every day,” said Søren Toft, Chief Operating Officer at Maersk Line.
The Panama Canal accounts for roughly 5% of world sea trade and the expanded Panama Canal is estimated to generate a 3% increase in cargo volumes transiting the Canal, according to Maersk.
“Since 60% of the Panama Canal traffic either begins or ends in US ports it will have a direct, notable impact on the trade between Asia and the United States East Coast,” the company said.
Anders Boenaes, Head of Network at Maersk Line, commented: “The expansion provides us with more options, most notably to our Asia to South America and Asia to US East Coast routes. It is likely that Maersk Line will make increased use of the expanded Panama Canal and adjust one or more services with larger vessels to begin sailing through its new locks.”
Join the 67,490 members that receive our newsletter.
Have a news tip? Let us know.