Tuesday, July 21, 2015

Panama Canal to increase China-Americas trade

Panama Canal's expansion, expected to be finished in 2016, will increase trade between China and the Americas, experts said in recent interviews with Xinhua.

The 50-mile, over 100-year-old Panama Canal, serves as a "world bridge," connecting the Pacific and Atlantic cutting down the overall distance by as much as 6200 miles between the two oceans. The canal currently accounts for 5 percent of global trade volume, which mostly involves trade between Asia and the Americas, according to the Panama Canal Authority (ACP).

Upon its completion in 2016, the canal will be able to accommodate Post-Panamax ships that are larger than Panamax ships. These ships will increase the canal's annual capacity from the current 300 million tons of cargo to 600 million tons. Around 17, 000 vessels will pass through the canal every year, up by 21 percent from the current 14,000 vessels, according to ACP.

The expansion of the canal means more and bigger ships will be able to pass through the canal, which is good news for Chinese shipping companies, said Wei Chunfeng, manager of COSCO Panama.

China is the canal's second largest client, after the U.S. and the volume is still rising, according to U.S. Department of Transportation's figures.

Panamax vessels have a cargo capacity of up to 5,000 TEUs only, but after the expansion, the canal will be able to handle vessels with a cargo capacity of up to 13,000 TEUs, ACP said.

"The shipping cost of each TEU will be lower," said Wei, whose company is the canal's most important Chinese client.

For more of the Shanghai Daily story: www.shanghaidaily.com


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