Panama Canal rival

If this is true it could reinforce China’s growing influence on global trade via the shipping market and weaken US dominance over the key shipping route of the Panama Canal, currently being widened at a cost of US$5.2bn.

There is also the possible knock-on effect to trade agreements with European ports such as Antwerp.

Back in January, Antwerp Port Authority and Panama Canal Authority (ACP) reconfirmed their collaboration agreement to promote trade between Antwerp and the West Coast of South America via the Panama Canal. It was the first agreement of its kind to be signed between the ACP and a European port.

Annik Dirkx, Port of Antwerp, said to Port Strategy that although it’s a little too early to talk about implications, there will no doubt be a knock on effect on Panama Canal trade.

“Panama will be ready earlier than Nicaragua and it will be deeper, so from this point of view will be a competitor for Panama. The effects on trade will depend on pricing amongst other things. What is clear, is that Panama Canal is enabling pacific trade towards the East Coast and that from there there might be an effect on atlantic trade towards Antwerp since we are market leader for this trade from the East Coast.”

The Chinese company selected for the development of the Nicaraguan Canal is reportedly HK Nicaragua Development Investment Co. Limited (HKND Group) and apparently the US40bn project could be completed in as little as ten years.

When completed the Nicaraguan Canal should be 22 meters deep and 286km long – far bigger than the Panama and Suez Canals.

This means it will be able to accommodate mega container ships of up to 250,000dwt, double the size of vessels that the Panama Canal will allow post expansion.