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Wider Panama Canal boosting Chinese shippers, US East Coast ports

By William Hennelly | China Daily | Updated: 2016-07-28 11:35
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The COSCO SHIPPING Panama makes its entrance during the inauguration ceremony for the expanded Panama Canal in Panama City, on June 26. Xinhua

The expanded Panama Canal is shaping up as a win-win situation for Chinese companies and the economy of the US East Coast.

Some entities that stand to benefit are the conglomerate Evergreen Group of Taiwan and COSCO SHIPPING of Shanghai, and PortMiami in Florida, now that larger cargo ships can traverse a deeper Panama Canal and reach the Eastern Seaboard.

"We welcome the expansion of Evergreen Line at PortMiami," Miami-Dade County Mayor Carlos A. Gimenez said last week. "PortMiami's more than $1 billion of completed infrastructure projects are paying off!"

The Evergreen Line has a new service that will stop at Singapore, Hong Kong, Chiwan port in Shenzhen, Shanghai, Ningbo port in Zhejiang province, and Manzanillo, Mexico, before crossing the Panama Canal and docking in Houston, Mobile, Alabama, Miami, Jacksonville, Florida, and Durban, South Carolina.

Evergreen Line recently upgraded the sizes of its Fast East container ships, more than doubling capacity to 8,452 shipping containers each, reported the Jacksonville Business Journal. They can move as much as two traditional Panamax ships but use 40 percent less fuel.

PortMiami Director and CEO Juan M. Kuryla said cargo lines transiting the port can reach 70 percent of the US market within four days, and there is a tunnel directly connected to the US Interstate Highway System.

On July 12, the Evergreen Ever Lambent container ship became the first vessel to traverse the expanded Panama Canal en route to Baltimore, Maryland.

Baltimore expects its port to benefit the most from the expanded canal, said James White, executive director of the Maryland Port Administration.

"I think the tide has turned for us in a positive way," White told the Baltimore Sun.

On June 26, the COSCO Shipping Panama, hauling 9,472 containers, made the first official voyage through the expanded canal, which was upgraded at a cost of $5.25 billion. The ship had set sail from the Greek port of Piraeus two weeks prior.

"The expansion of the Panama Canal, a critical shipping lane in the world that links the Pacific and Atlantic oceans, will have a major impact on various shipping markets, including those from the East Coast of America to the Far East, from Europe to the West Coast of America, and from the East to the West Coast of America," COSCO Chairman Xu Lirong said that day.

The giant Maersk Line is rerouting its Asia-East Coast service through the new canal.

"Using the new Panama Canal locks, Maersk Line is able to significantly reduce the transit days from Asian to North American ports. The transit times from Shanghai and Ningbo to Newark, Norfolk and Baltimore are now five to 10 days faster," the Danish company said in a July 21 release.

A liquefied natural gas tanker loaded on the US Gulf Coast and bound for Asian markets could cut its travel distance by about 5,000 nautical miles and seven to nine days, according to Martin Houston, co-founder of Tellurian.

The Boston Consulting Group and C.H. Robinson, a transportation logistics company, estimated last year that as much as 10 percent of the container traffic from East Asia to the US could shift to US East Coast ports instead of landing on the West Coast and finishing the journey by truck or rail.

That would reroute volume "equivalent to building a new port roughly double the size of the ports in Savannah and Charleston", the firms said.

The Port Authority of New York and New Jersey said that a $1.3 billion project to raise the 85-year-old Bayonne Bridge will enable ships to pass under the span by late 2017.

"The old Panama Canal was an impediment to deploying ships to the East Coast of the United States from Asia," said CEO James I. Newsome III of the South Carolina Ports Authority, which is planning to dredge Charleston, South Carolina's 45-foot-deep harbor to 52 feet.

Newsome said that if Asian cargo bound for Charlotte, North Carolina, landed in Los Angeles, it would cost $2,000 to send it across the US by rail. If it landed in Charleston, it would cost only $600 by truck.

The Panama Canal, which the US financed and engineered, was completed in 1914. The US turned over sovereignty to Panama in 1999.

The canal's cargo capacity has doubled, and it has a third lane to accommodate larger ships that can carry about 14,000 containers, up from 5,000.

It hasn't been all smooth sailing, though. On Monday, the COSCO Panama, hit a wall in a new canal lane, the third incident since the June ceremony.

Amy He in New York and The Associated Press contributed to this story.

Contact the writer at williamhennelly@chinadailyusa.com

 

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