Potential Impacts of Transoceanic Passages and Canals
The setting or expansion of transoceanic passages and canals can have three types of interdependent impacts.
  • Operational impacts. They relate to the characteristics of the passage in terms of capacity, reliability and transit time, all of which linked to its usage costs. Because of their technical characteristics, passages such as Panama and Suez define ship classes and operational conditions for the global maritime transport system. Technical improvements (e.g. widening, dredging) usually result in lower unit costs for maritime shipping, particularly since better economies of scale can be achieved. These lower costs must however be pondered by the toll structure in place for the passage.
  • Substitution impacts. They relate to the impacts on existing trade flows, particularly due to operational improvements and lower transport costs along maritime routes. Cargo that used to transit through specific routes (such as a landbridges) can be diverted to take advantage of the improved cost structure of the passage. This also results in changes in the configuration of maritime shipping networks with a greater convergence level of these routes and the location of transshipment hubs at strategic locations along these routes.
  • Induced impacts. They relate to the impacts on new economic and commercial opportunities. Improved operations and lower transport costs commonly result in expanded or new trade relations among regions experiencing the most significant cost reductions. This expanded trade results in higher utilization levels of the passage, inciting the setting of transshipment hubs nearby as well as logistics zone providing added value to more complex and diversified trade.
The issue concerns the derived demand function of transportation, implying that commercial actors indirectly react to impacts in operational changes of a transoceanic passage (e.g. more capacity). Since these impacts affect only one element in all the considerations behind a commercial transaction (e.g. sourcing strategies, resource costs, labor costs), it is difficult to extract its specific contribution. Actors such as importers, exporters, manufacturers, retailers are making decisions and the derived demand of these decisions is accommodated by maritime shipping companies. On the short term, it is usually the derived demand of economic activities on transportation that is the most powerful factor. However, on the long term the induced impacts are starting to play a more significant role since they have retroactively impacted the derived demand. For instance, a maritime shipping company able to offer higher capacity and lower transport costs is likely to trigger induced impacts. Only significant operational changes (lower costs and/or shorter routes) will have relatively immediate impacts. Marginal improvements usually pan themselves out over longer time periods.