Panama Canal Expansion and the Effect on US ports

 

The Panama Canal expansion is expected to be done by the year 2014. The expansion is going to allow the Post Panamax ships to use the canal instead of traveling farther distances and or use land bridges to move goods across the United States. Before the expansion the Panama Canal could only accept ships as big as 5,000 TEUs, however the new expansion expects the canal to be able to accept ships as big as 12,000 TEUs. With the growth of the canal, transportation companies will be able to take advantage of the economies of scale due to being able to ship more goods on one ship than you could on two. Money will be saved because only having to run one ship is less gas used, and less labor needed.

Companies from the United States and the rest of the world will want to take advantage of the Post Panamax ships since there are so many benefits to using these larger ships. However, most of the ports on the United States east coast are not capable to support the larger ships. The only current port on the east coast is the Norfolk port in Virginia and three more will be ready by the year 2015. Since this is the only port the U.S. will have to invest a lot of money into its ports so they can dredge them and add the necessary infrastructure to support the new larger ships.

The expansion of the Panama Canal will see improvement in the amount of ship traffic to American ports.  Obviously, the ports will need to be expanded both in width and depth in order to support larger ships, but also land transportation out of ports and intermodal transportation will see an increase.  The number of roads in and out of the ports may need to be improved, as well as the railroads.  With the rise of intermodal transportation, more cranes will be needed to transport containers from ships to trucks or railcars.  The number of flatbed trailers as wells as flatbed railcars may need to be increased to accommodate the number of containers coming off of the larger ships.  With an increase in these containers, the inventory system for containers may need to be updated and expanded to accommodate the larger ships and increased traffic.

 

For further reading:

http://online.wsj.com/article/SB10001424052702303448404577410131264191046.html

http://en.wikipedia.org/wiki/Panama_Canal_expansion_project

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s