Bigger and cheaper Suez battles with Panama, LA-LB for Asia-to-US-east coast cargo

THE Suez Canal Authority has joined APL in its pitch to avoid Panama constrictions and LA-Long Beach transhipment expenses and use Suez to get containers directly to US east coast and Gulf port destinations.

"We will give service with lower prices," Admiral Ahmed Fadel, chairman of the Suez Canal Authority, told Bloomberg, adding that tankers from the Persian Gulf were getting 35 per cent discounts.

With delays, strikes and costs for inland transport rising in America, Suez offers a direct all-water route to the US east coast, said Admiral Fadel. Trade from Asia increased Suez's container tonnage 19 per cent in the year ending in November, boosting revenue 20 per cent to a record US$4.2 billion.

APL, the container division of Singapore's Neptune Orient Lines, introduced its eight-ship Asia-to-US Suez Express service east coast route in August, and tells shippers much the same thing.

Suez can handle the biggest containerships, up to 14,000-TEU - which haven't even been built yet - three times Panama's capacity. Some 18,000 ships used Suez last year compared to Panama's 14,000. But Suez handles less than six per cent of Asia-to-US containers, with more than 90 per cent going to the US west coast, where they are carried inland by rail and truck or transferred to smaller ships able to navigate Panama. Some 3,000 to 5,000 FEU a week move from Asia to the US via Suez out of a total of 79,000 FEU, according to Transpacific Stabilisation Agreement statistics.

The Suez Canal Authority is strengthening ties with US east coast terminals including the Port of Virginia in Hampton Roads before the Panama Canal completes a seven-year $5.2 billion expansion that will increase its capacity.