Once established, these economic cooperation agreements will remove trade barriers and thereby accelerate growth of international trade and cargo flows. Next, Hsieh analysed major trends in the container shipping market. “The current trend in vessel upsizing is to benefit from the scale economics that large vessels afford by reducing unit cost,” he said. However, to effectively produce the expected cost benefits, Ultra-Large Container Ships have to be sufficiently loaded. Carriers are thus motivated to join alliances and work with other members to raise capacity utilization on these big ships. After its expansion project is completed in 2016, the Panama Canal will be able to handle new ‘Panamax’ vessels of around 12,000-teu ships, causing a fundamental shift in U.S. supply chains and cargo movement patterns. To prepare for the large vessels and cargo flows attracted to the expanded Panama Canal, several ports on the U.S. east coast are deepening channels and enlarging their facilities, added Hsieh.
