Impact of the New Panama Canal on the Competitiveness of Hamburg - Le Havre Range Ports
Edwin Van Hassel, University of Antwerp, Hilde Meersman, University of Antwerp, Eddy Van De Voorde, University of Antwerp
The expansion of the capacity of Panama make it accessible for larger ships. The question is how the new Panama canal will lead to a different calling pattern in the Hamburg - Le Havre range and if it will affect the competitiveness of its ports.
Works are ongoing to expand the current Panama Canal to double its capacity and to make it accessible for larger ships, featuring a different cost structure. In particular, new locks are being built and existing channels are being deepened. This operation is meant to give access to ships of the New Panamax type. This may have big implications on the maritime flows of goods, not only locally, but also on international loops between US, Asia and Europe. The question is how this enlarged canal will influence the total generalised costs from a point of loading to a destination. A sub-question is whether a scale increase of the ships on the loops to and from the Hamburg - Le Havre range, such as a loop from the United States West Coast to Europe, will lead to a different calling pattern in the Hamburg - Le Havre range and whether it will affect the competitiveness of its ports. Potential effects might be a higher concentration of calls in a more limited number of ports in Europe, a shift towards Southern-European ports which are closer to the main sailing line between Asia and the US, or changing global trading patterns, whereby new trades between the Hamburg – Le Havre range and the US West Coast emerge.
This paper tries to answer the above research questions by designing an expanded model to simulate the cost of a complete loop of different types of container ships together with the costs in the ports of loading and unloading, and the costs of the hinterland transport. . As such, the model allows calculating the total chain cost from a point of origin (either a hinterland region or a port) to a destination point (also a port or a hinterland region) for different types of container ships. An existing loop of a container shipping company can be introduced in the model.
With the model, the different scenarios can be considered, and the impact on the cost structures of the chain, on the shares of the maritime, port and hinterland components, and on the hinterland division in Europe will be simulated.
These findings have important implications, not only for policymakers who must decide on whether to invest in larger port capacity as a consequence of the renewed Panama Canal, but also for the businesses concerned, as it provides them with scientifically sound information about whether bigger ships are needed on which routes.
This research contributes to the existing literature in two ways. First of all, it quantifies the impact of a canal capacity investment on container shipping throughout the total chain. Secondly, this is done from a bottom-up engineering modelling approach.
Association for European Transport