The Panama Canal expansion will lead to significant changes in trade between Asia and America

Almaty. June 27. Silkroadnews – The expanded Panama Canal was opened on Sunday, “Kommersant” newspaper writes.

“Canal expansion works continued for 9 years, the costs of the project made $5.4 billion. As a result of the expansion the channel capacity is to increase almost twice,” the publication says.

According to the experts, the expanded Panama Canal opening will lead to significant changes in the trade, especially between Asia and America.

Last year, the Panama Canal had 6% of the world trade, or 340 million tonnes of goods.

Now the third line has been added to the canal allowing transportation of ships with a capacity of 14 thousand containers, a maximum capacity of the vessels that could pass through the channel prior to expansion was 5 thousand containers.

Following the expansion, the Panama Canal can now be more successful competing with the Suez Canal, thereby allowing to shorten the route from Asia to the east coast of America by five days with no need to go around the continent by the Cape Horn.

According to the Boston Consulting Group and Logistics C. H. Robinson Worldwide, by 2020 10% of container traffic between Asia and the United States will move from the ports on the west coast to the terminals on the east coast. Now 136 ships that did not pass through the channel before its expansion have agreed to change their routes passing through it.

At the same time, the experts add, the Panama Canal expansion is not a panacea and cannot guarantee that in all the cases the cost on the ports’ adjustment for larger vessels will be repaid. Moreover, even after the expansion the channel cannot serve the vessels with capacity of up to 20 thousand containers.

The executive vice-president for planning and business development of Panama Canal Authority Oscar Bazan said, the canal management expects the expansion to result in 16-17% revenue growth next year. According to him, the canal’s revenue may increase due to, among others factors, growth of liquefied natural gas (LNG) production in the U.S. and the new export markets’, such as Japan, South Korea, India and China, interest in this gas. He expects the LNG to become one of the major goods transported through the canal by 2020.

BBC Russian office reports, the Chinese container ship became the first vessel passed through the newly opened Panama Canal expanded.