Panama Canal Expansion Should Slice US Grain Freight Rate

MarineLink.com
Wednesday, December 11, 2013
Image credit PCA

Upon completion of the expansion of the Panama Canal, the cost to transport grain from the U.S. corn belt to Asia will drop by an estimated 12%, thus increasing the cost competitiveness of the U.S. as a grain exporter to Asia, Rabobank forecasts.

In a new report, “Panama Canal: Expanding the Gateway for U.S. Grain to the East,” Rabobank says the expansion of the Canal will accommodate grain-laden ships from the U.S. of 25% more capacity than before, resulting in a shift in U.S. grain shipping routes that doubles the draw area west of the Mississippi River for exports through the Panama Canal.

Rabobank predicts the decline in shipping cost, coupled with the increased capacity, will help ports along the U.S. Gulf to regain export volume lost to ports in the Pacific Northwest over the last decade, and also benefit large grain traders and exporters with operations in the U.S. Gulf region. Ocean freight accounts for 60% of total shipping cost, so increased shipping capacity has a material effect on cost savings.

“The Panama Canal expansion is great news for American competitiveness,” said Will Sawyer, Analyst with Rabobank’s Food & Agribusiness Research and Advisory group, and author of the report. “Whereas nearly 80% of U.S. grain exports went through the U.S. Gulf a decade ago, demand growth in Southeast Asia and increased efficiencies at U.S Pacific Northwest ports have reduced that market share to between 60% and 65% currently. The Canal expansion and resulting decreases in shipment cost and time will greatly improve the cost position of the U.S. vis-à-vis Brazil, Argentina and other grain exporting countries in Eastern Europe."

“The expansion is also positive for U.S. Gulf ports,” Sawyer continued, “as the doubling of the draw area in Minnesota, Iowa and Missouri will allow U.S. Gulf ports to take back much of the export share lost to the Pacific Northwest over the past 15 years. Most of this shift will be driven by increased corn exports through the U.S. Gulf, reversing the recent trend.”

Source: Rabobank (www.Rabobank.com)
 

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Egypt Says Finishes Work on New Suez Canal

Egypt has finished building its New Suez Canal, its overseer said on Wednesday, a project President Abdel Fattah al-Sisi sees as a symbol of national pride and

CMA CGM to Resume Service to Iran

The world's third-largest container shipping group, France's CMA CGM, said on Monday it would resume operations to Iran following the deal between Tehran and world

Obituary: Yacht Designer Jörg Beiderbeck

Jörg Beiderbeck, recognized as a figure among the world’s top megayacht designers, has passed away at the age of 69 on the evening of Sunday, August 2, at his home in Bremen-Vegesack,

Contracts

GE Gas Turbines to Power US Navy’s New Destroyers

The U.S. Navy’s new DDG 121 and DDG 122 Arleigh Burke-class destroyers will be powered by eight LM2500 marine gas turbines supplied by GE Marine, who also received

Tanker Retrofitted with Dual Fuel Engine

Caterpillar Marine informs it has begin a dual fuel engine retrofit conversion onboard the 472-foot Fure West tanker, owned by Furetank Rederi A/B. The MaK M 43

Diana Charters Containership to Maersk

Container shipping company Diana Containerships Inc. announced that, through a separate wholly-owned subsidiary, it entered into a time charter contract with Maersk

Finance

Egypt Says Finishes Work on New Suez Canal

Egypt has finished building its New Suez Canal, its overseer said on Wednesday, a project President Abdel Fattah al-Sisi sees as a symbol of national pride and

Harper Government Invests in Naufrage Harbor

The Honorable Gail Shea, Minister of Fisheries and Oceans, announced today an investment to improve safety and working conditions for fishermen at Naufrage Harbor, Prince Edward Island.

Strategic Marine’s Stock Program Full Power Ahead

Strategic Marine, the specialist shipbuilder and fabricator, has confirmed its stock program of personnel transport vessels is market-ready. “Our stock program

Logistics

Pentalver Opens London Container Facility

U.K. inland container service operator Pentalver opened a new five-acre site at the U.K.’s newest deep sea container port, DP World London Gateway, the London Port Authority announced.

Egypt Says Finishes Work on New Suez Canal

Egypt has finished building its New Suez Canal, its overseer said on Wednesday, a project President Abdel Fattah al-Sisi sees as a symbol of national pride and

CMA CGM to Resume Service to Iran

The world's third-largest container shipping group, France's CMA CGM, said on Monday it would resume operations to Iran following the deal between Tehran and world

 
 
Maritime Careers / Shipboard Positions Maritime Security Navigation Offshore Oil Pipelines Pod Propulsion Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2352 sec (4 req/sec)