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How Will the Panama Canal Expansion Alter Global Trade for U.S. East Coast Ports?

Published: 20 May 2015 01:05:40 PST

The shortest path between two points is a straight line, it just so happens that this line is 50 miles long and the two points are the Atlantic and Pacific Oceans.

Global trade has grown dramatically, as we all know, but one of the most vital transit routes – the Panama Canal – has remained the same since it opened in 1914. This will all change by the end of 2014 when the $5.25 billion expansion of the Panama Canal should be completed, enabling the movement of larger vessels with a maximum draft of 50 feet instead of the current draft limit of 39.5 feet. With a deeper draft, 25% longer and 50% wider ships can pass freely through the canal carrying two or three times the cargo with a maximum of 12,600 TEUs. This will alter the pattern of trade, impacting the Unites States most as being the destination or origin of two-thirds of the goods that pass through the canal.

This is a project of massive proportions; the scene is frantic with non-stop activity from workers and machines laboring in the tropical heat. Giant hydraulic excavators scoop and remove blasted rock and soil…ever wonder how much canal crews are dredging for the expansion? 130 million cubic meters of rock and soil…enough to fill the Empire State Building nearly 130 times. Interesting!


East and Gulf Coast developments are of great importance to West Coast ports with the Panama Canal Expansion project; the West and East Coast ports in recent years have engaged in a battle over market share. This battle will only intensify when big ships are able to transit the canal in 2014. Container trade will see one of the biggest changes, as expansion will enable massive post-Panamax vessels to use the canal. Shipping companies in Asia will be able to use the canal to bypass the West Coast and sail directly into ports such as New York/New Jersey, Charleston, Jacksonville, and Norfolk.

The Port of New York-New Jersey is the one to keep your eye on. It is the largest on the East Coast, with room to expand. Currently only 50% of its 12 million TEUs of capacity is being utilized, in addition to the construction on the Bayonne Bridge and fast rail intermodal being serviced by two railroads - the East Coast is getting ready. The number of vessel calls on the East and Gulf Coasts will increase significantly as cargo shifts away from the West Coast, which at “boom” times experiences congestion.

The challenge is predicting the extent and location of the impact. How will you prepare for the altered pattern of trade?

Use PIERS data to identify which ship lines, ports, terminals and trade lanes are being used and so much more. Visit PIERS to find the solution that’s right for you.

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