Suez Canal launches price war with Panama

The Suez Canal Authorities (SCA) have just started a price war with the upcoming expanded Panama Canal.

2 months ago SCA introduced a discount to counter-act carriers going round Africa on the backhaul from US East Coast to Asia. Unfortunately for the SCA, the discount was insufficient to fully counter the African threat. However, since then, bunkerfuel prices have been steadily climbing, slowly eroding at least part of the benefits of the African routing.

With the new announcement of discounts of up to 65% for US East Coast to Asia liner services, it is clear that this is more aimed as a direct competitive move against the Panama Canal and less aimed at Africa. Especially the fact the Northern ports on the USEC "only" receive a 45% discount whereas as Southern ports can get up to 65% discount show that this is aimed at preventing carriers from switching to the new expanded Panama Canal.

Which competitive move will we then see from the Panama Canal Authorities?

There is indeed a real risk of a spiraling price war between the two canals which would be financially beneficial to the carriers, but highly detrimental to both canal authorities.

https://www.lloydslist.com/ll/sector/containers/article527112.ece