CHAPTER X

COMPETITION OF THE SUEZ AND PANAMA ROUTES

The question is often asked: To what extent and with what success will the Panama Canal compete with the Suez Canal? The construction of a waterway across the American Isthmus has made it possible for the countries on both sides of the Atlantic to choose between a western and an eastern gateway of approach to the Pacific. To what extent will the routes through these two gateways be alternative and competitive in the actual conduct of the world's commerce, and in what measure, if at all, may the canals at Suez and Panama be of complementary service to international trade?

Before the Panama Canal was opened, the commerce between the eastern seaboard of the United States and the Pacific shores of Asia was shipped either directly via Suez or indirectly via Europe whence it was sent to the Orient by the Suez route. Of course, practically all of Europe's trade with the Far East, except that carried over the Trans-Siberian Railroad, made use of the Suez Canal, and so did all the passenger steamers

and some of the freight vessels operated between Europe and Australia and New Zealand. In the future, the commerce between the eastern part of the United States and transpacific countriessave such minor share of the trade of America with the Orient as may leave or enter the United States via Pacific ports and be transported across the country by the transcontinental railroadswill move via Panama; and it may come to pass that some of the trade of northwestern Europe with Japan, northern China, and Siberia will prefer the Panama route.

The Panama Canal at once caused the shifting of some traffic from the Suez route to the new waterway, and it is probable that the future development of transpacific countries will create commerce that would have used the Suez Canal had not a waterway been constructed across the American Isthmus. The nature of the competition between the Panama and Suez canals and the probable effects of their rivalry both upon the traffic of the two waterways and upon the commercial advantages of the sections of the world where the traffic territory of one canal joins or overlaps the field from which the other canal draws its traffic will be made clearer by a statement of the factors that will determine the routes vessels may be expected to take in trafficking between the eastern seaboard of the

United States and transpacific countries and between Europe and the Far East.

Three main considerations may influence the master or owner of a vessel in deciding which one of two or more alternative routes shall be taken to reach a distant port-relative distances, opportunities to trade en route at intermediate ports, and the cost of fuel by each of the possible routes. In addition to these major factors, other minor considerations may have some influence. One route may be safer than another and the insurance rates lower. One route may run through the Tropics where the excessive heat puts a hard strain on the engine-room force and may injure the cargo, while the alternative course may lie mainly in the temperate latitudes where the crew will be comfortable and the cargo free from risk of deterioration. By one route the vessel may sail with winds and currents, while by another course the ship must breast winds and opposing currents. In the days of sailing vessels, the course taken was determined largely by wind and weather and the direction of the ocean's flow, but now the forces of the air and sea, while they may modify, can seldom control the route followed by the large enginedriven craft that carry the world's sea-borne com

merce.

In discussions of the effect of the Panama Canal upon ocean routes, the factors other than distance

that influence the movements of vessels are sometimes neglected, it being assumed that the route shortest in distance and time of voyage between the ports of clearance and ultimate destination is the best one to take. As a matter of fact, the shorter route may be the less profitable, or the more expensive one, to follow.

The shorter route will be less profitable than the longer one if by taking the less direct course the vessel can deliver and take on cargo at several ports on the way. If a ship clears from home or the starting port with a full cargo for the port of ultimate destination, the master will have no interest in traffic at intermediate points; but nearly all vessels that are run in line services and many vessels operated under charters must take freight for several destinations in order to secure cargo of such tonnage and variety as will give the vessel a full or satisfactory lading. Ships must move in and with the currents of traffic and not by short cuts, unless, as is true of the minor share of clearances, the vessel sets out on its voyage laden with a cargo for a single destination.

The shorter of two possible routes may be made the more expensive one by the higher price of fuel that must be purchased on the way to the destination. The two large items of the cost of operating vessels are fuel and wages; and, even

in the case of a freight vessel that burns only 40 or 50 tons of coal daily, a difference of one to two dollars a ton in the cost of coal may amount to several thousand dollars during a round-trip voyage between a port in Europe or the United States and a port in Chile, Australia, or Japan. The cost of coal by routes through the Panama Canal will, fortunately, be lower than by most alternative routes. The effect of relative fuel costs by way of the Panama Canal and other routes has such an important bearing on the use of the canal by vessels plying between Europe and western South America, between Europe or the eastern United States and the Orient-particularly Japan, northern China and Siberia-that the facts regarding fuel supplies and fuel costs via the Panama Canal and alternative routes are reserved for special discussion in the following chapter.

The distances from the eastern seaboard of the United States to Japan, China, and the Philippines via Panama and via Suez, by way, in each case, of the intermediate ports at which calls are usually made, are given in some detail in Chapter III and are referred to briefly in Chapter IX in considering Europe's interest in the Panama Canal. Likewise the distances from Europe to the Orient and Australia by way of Suez and Panama have been set forth; and, upon Map 4,