A comparative study on pollutant emissions and hub-port selection in Panama Canal expansion

Tai Hui-Huang
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Tai Hui-Huang: Department of Shipping and Transportation Management, National Kaohsiung Marine University, No. 142, Hai-Jhuan Road, Nan-Tzu, Kaohsiung 81143, Taiwan

Maritime Economics & Logistics, 2015, vol. 17, issue 2, 163-178

Abstract: Located between the Pacific and Atlantic Oceans, the Panama Canal has reduced both transit time and costs for the container shipping industry in particular. Once canal expansion is completed, container carriers will immediately face emission reduction demands in North America, and will be required to address problems regarding hub port selection for transshipments in the wider Caribbean region (WCR). This will occur because of the upsizing of mother vessels in trunk routes and the global promotion of the use of liquefied natural gas (LNG) as ship fuel under what is known as the clean-lines strategy. As a result, canal expansion will facilitate changes in ship size related to hub selection, pollutant emissions and the use of fuel alternatives which must be addressed by carriers, in particular in regards to the emission control area (ECA) requirements of North America, the US Caribbean and the WCR region. In this study, we use the activity-based method to estimate pollutant emissions and trunk route deployments from Asia to the East Coast of North America. The results show that slow-steaming yields substantially reduced emissions, and that the upsizing of mother vessels after canal expansion will increase pollution emissions accordingly. However, shipping companies that use hub-port selection to plan intercontinental transshipment strategies and conform to a fuel-efficient strategy can substantially reduce emissions. The innovation of this article is in its analysis of actual fuel use, emissions reductions and hub selection in the aftermath of canal expansion. The implementation of this strategy requires converting from heavy oil to LNG fuels, as well as changes in shipbuilding technology, port industries, related infrastructure and regulations on environmental protection of various governments.

Date: 2015
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