Skip to main content

SeaIntel: Carriers to secure big savings from the Nicaragua Canal

Quality journalism requires investment. Please use the link below when sharing this article with others. 

President Daniel Ortega together with the canal project's major Chinese invstor, Wang Jing.
Photo: Esteban Felix

If the Nicaragua Canal is realized carriers will secure significant savings in terms of sailing time and - especially - fuel consumption by using the new alternative to Suez and Panama.

Published 21.07.14 at 13:07

There could be massive savings in store for carriers opting to use the planned Nicaragua Canal going forward. 

The canal will connect the Pacific and the Caribbean Sea, and was approved by an authority committee in the country on July 8.

In a new analysis SeaIntel takes a closer look at the canal, which will form a de facto alternative to the canals in Suez and Panama if the USD 40 billion project is actually realized. 

If carriers sailing from Asia to the US East Coast (USEC) opt to use Nicaragua as a shortcut instead of Panama, the analysis shows that the carriers could reduce their bunker consumption by 17 to 30 percent, depending on the size of the ship, according to SeaIntel.

"Our analysis clearly shows that it would be beneficial for the carriers from a cost perspective to use the coming Nicaragua Canal on the Asia-USEC services instead of using the Panama Canal, due to the shorter sailing distance and the possibility for the deployment of larger vessels," 
says SeaIntel, stressing in the analysis that the canal still remains mostly an idea even though there is currently a comprehensive feasibility study underway to assess the costs of the project, with major consulting firms studying various aspects of the canal.

SeaIntel bases the analysis on two services from Asia to the US East Coast. One through Panama and one through Suez. The route through the Panama Canal has a total distance of 21,500 nautical miles, while the same service replaced with the Nicaragua Canal has a total distance of 20,200 nautical miles, which according to SeaIntel corresponds to a 6 percent reduction. If the Suez Canal is replaced with the Nicaragua Canal, the result is a 5.5 percent reduction.

"As the carriers will be able to reduce the sailing distance by 6 percent by switching to the Nicaragua Canal there is a clear incentive to make the switch in itself, but the Nicaragua Canal also allows the carriers to deploy larger vessels through the Nicaragua Canal on the Asia-UESC services."

Battle for the big ships

And the possibility of using the biggest ships in the Nicaragua Canal, which is expected to start construction in December this year and be ready for use in 2020, gives the canal an advantage over the other two canals. An expansion of the Panama Canal has been underway for years, set to be completed and ready for ships of up to 2013 teu in 2016. In comparison the new generation of container ships, such as Maersk Line's Triple-E, will be able to use the Nicaragua Canal. SeaIntel notes that the ports must be able to handle the bigger ships on the various services in order for Nicaragua to benefit from this advantage. However, several ports are getting ready for the bigger ships.

"Irrespective of whether it will be possible for the carriers to deploy larger vessels on the Asia-UESC services through the Nicaragua Canal, they will still see a considerable reduction in their bunker cost by switching from the Panama Canal to the Nicaragua Canal,"
 says the analyst agency.

The analysis shows that if the carriers use ships of 12,500 teu it will be possible to reduce the speed from 14 to 13 knots by using the Nicaragua Canal instead of the Panama Canal. This amounts to a 17 percent annual reduction in fuel consumption, and if the ports on the services are ready to handle ships of 17,500 teu by 2020 the carriers will be able to reduce their bunker costs by 25-30 percent for 15,500 and 17,500 teu vessels, respectively.

Maersk Line supports the Nicaragua Canal

As Suez is currently able to handle the ultra-large vessels the bunker saving will not be as significant here, though the carriers will be able to cut around 12 percent from their fuel costs for ships of less than 15,500 teu. But it is mainly Panama that is set to take a hit if Nicaragua successfully realizes the canal:

"If the proposed Nicaragua Canal becomes a reality, the Panama Canal Authority will face a significant challenge in maintaining the Asia-UESC services sailing through the Panama Canal."

Cementing sustainability

Nicaragua's president Daniel Ortega has been a major driving force behind the project, which was approved on July 8th, where the Chinese CEO of the development project together with the president announced a more specific plan for the project. The 278 kilometer long canal will run from the mouth of the Brito river by the Pacific to the Punto Gorda river on the Caribbean side, as was proposed by the Chinese company HK Nicaragua Canal Development Investment.

Around 4,000 people from consulting firms around the globe - such as American McKinsey - have spent approximately one year working on a comprehensive feasibility study to map the sustainability, both financially and economically, of digging a canal.

The study should have been completed in July, but it has been postponed to October.

 The canal will be 230-250 meters wide and 28 meters deep, writes SeaIntel.

Related Articles:

Popular posts from this blog


While "Flavor" is very subjective, and each country that grows mangoes is very nationalistic, these are the mango varieties that are the most sought after around the world because of sweetnesss (Brix) and demand.

The Chaunsa has a Brix rating in the 22 degree level which is unheard of!
Carabao claims to be the sweetest mango in the world and was able to register this in the Guiness book of world records.
Perhaps it is time for a GLOBAL taste test ???

In alphabetical order by Country....



Alphonso (mango)
From Wikipedia, the free encyclopedia

Alphonso (हापुस Haapoos in Marathi, હાફુસ in Gujarati, ಆಪೂಸ್ Aapoos in Kannada) is a mango cultivar that is considered by many[who?] to be one of the best in terms of sweetness, richness and flavor. 

It has considerable shelf life of a week after it is ripe making it exportable. 

It is also one of the most expensive kinds of mango and is grown mainly in Kokan region of western India.

 It is in season April through May and the fruit wei…

Mangoes date back 65 million years according to research ...

Experts at the Birbal Sahni Institute of Palaeobotany (BSIP) here have traced the origin of mango to the hills of Meghalaya, India from a 65 million year-old fossil of a mango leaf. 

The earlier fossil records of mango (Mangifera indica) from the Northeast and elsewhere were 25 to 30 million years old. The 'carbonized leaf fossil' from Damalgiri area of Meghalaya hills, believed to be a mango tree from the peninsular India, was found by Dr R. C. Mehrotra, senior scientist, BSIP and his colleagues. 

After careful analysis of the fossil of the mango leaf and leaves of modern plants, the BISP scientist found many of the fossil leaf characters to be similar to mangifera.

An extensive study of the anatomy and morphology of several modern-day species of the genus mangifera with the fossil samples had reinforced the concept that its centre of origin is Northeast India, from where it spread into neighbouring areas, says Dr. Mehrotra. 

The genus is believed to have disseminated into neighb…

DHL (INDIA) makes gifting mangoes as easy as 1-2-3-....

Gifting mangoes is now easy with DHL
Announcement / Corporate

 May 19, 2011, 14:04 IST

Come this summer pamper your loved ones abroad with a box of delicious mangoes through DHL’s Express Easy Mango service, a unique one-stop-shop and hassle-free service for gifting mangoes all across the world.

This unique service by DHL Express, the world’s leading express company, allows customers to send mangoes from India across the world to the following countries Belgium, Canada, Czech Republic, Germany, Greece, Hungary, Hong Kong, Italy, Luxemburg, Maldives, Netherlands, Norway, Oman, Qatar Singapore, Switzerland and Sweden.

Mangoes can be availed of free of cost by merely paying for the Air Express service. In addition, DHL Express assists customers with the necessary paperwork along with procurement of quality-grade Alphonso mangoes.

Commenting on the new service, Mr. R.S Subramanian, Country Head, DHL Express India said: “With the advent of the mango season, it is no wonder that DHL Express Ea…