The Panama Canal Expansion and Its Impact on East–West Liner Shipping Route Selection

Abstract

Through an empirical study of ocean-borne trade between Hong Kong and New York, we combined qualitative and quantitative analysis to examine route selection decisions in a post-expansion era of the Panama Canal. A two-stage methodological framework was developed to assess the competitiveness of the three route alternatives, namely the Panama and Suez canals and the US intermodal system. In the first stage, a combination of literature review and expert knowledge was employed to identify the determinants of route selection. In the second stage, fuzzy theory and the multi-criteria decision-making technique were used to evaluate the criteria and the route alternatives. The results indicate that transportation cost is the most important factor in choosing a route, followed by transportation time, reliability, and route characteristics. The “all water route” via the Panama Canal is preferred over the Suez and U.S. intermodal options.