SHIPPING
Canal Anxiety
Experts warn U.S. ports are not ready for bigger ships,
cargo surge from expansion of the Panama Canal
By MATT HILBURN, Associate Editor
Expansion of the Panama
Canal could be an economic boon to ports in the
southeastern United States, but experts warn that most U.S. ports
and their attending infrastructure
are not ready to handle the larger
ships and the surge in cargo they
will bring.
These benefits and concerns
were addressed during the “
Shifting Trade Routes — Planning for
the Panama Canal Expansion”
conference, held in Tampa, Fla.,
Jan. 23-24. It was sponsored by the
U.S. Maritime Administration, the
Tampa Port Authority and the Association of American
Port Authorities.
“I think the conference opened the eyes of many
about the opportunities and challenges ahead,” said
Maritime Administrator Sean T. Connaughton. “We
must start to invest in U.S. ports now to take advantage
of the ‘new’ Panama Canal.”
Continued growth in world trade, and the desire of
shippers to get their products as close to the consumers
as possible in the most economical way, will continue to
provide opportunities to efficient ports that are also well
connected by rail and highways, as container shipments
increasingly will be the way goods are moved.
According to the American Society of Civil Engineers’
“Report Card for America’s Infrastructure 2005,” the
southeastern ports of Norfolk, Va.; Charleston, S.C.; Savannah, Ga.; Miami and Houston will see container traffic increase by an average of nearly 300 percent by 2020.
According to Robert West, the managing director for
maritime services at Global Insight Inc., a forecasting
company covering more than 200 countries and approximately 170 industries, containers moved 34 percent of
the goods through the Panama Canal in 2005. By 2025,
he expects that figure to be 59 percent. In 1996, 200,000
Trade Opportunities
The ground-breaking ceremony for the Panama Canal expansion
project took place in Panama City Sept. 3 and work is expected
to be completed by 2015.
■ A new set of locks will double capacity and allow longer, wider
ships through the nearly 100-year-old waterway.
■ The canal services more than 144 transportation routes from
around the world.
■ The cost of the canal expansion is estimated to be more than
$5 billion and will be paid for entirely by canal users.
twenty-foot equivalent units (TEUs), or containers,
moved through the canal; in 2007 it was 3 million TEUs.
West said that even despite an economic slowdown,
container traffic growth within the next five years will
push many ports to the limits of their capacity. This is
before the canal expansion will be complete, which
currently is scheduled for 2015.
Capacity limitations already are causing shippers to
seek alternative routes to get goods from the Pacific to
the central and eastern United States, such as over land
from Mexican ports into Texas or from Canadian ports
into Chicago.
“The expansion of the Panama Canal will do little to
benefit global commerce unless considerable investment
in transportation infrastructure is undertaken in the
ports of the western hemisphere,” said Federico A.
Humbert, the ambassador of the Republic of Panama.
“Very soon, larger and more numerous ships will be
crossing the canal en route to the ports of the Americas.
We must be ready to deal with this increased demand.”
Trading patterns already are changing. In the past,
the most cost-effective and predominant way cargo
moved from China to the U.S. East Coast had been to
ship it to West Coast ports such as Los Angeles/Long
