It has been eight years since Panamanians passed a referendum to modernize the Panama Canal, and it is now 85% complete. After the project is completed, the canal will have a third set of locks, and a deeper waterway to accommodate larger vessels. These changes are expected to “increase vessel capacity from 4,500 to 14,000 TEUs while allowing another 2,000 transits annually.” (Via Inbound Logistics)
The Panama Canal’s expansion has already impacted investment and development of ports up and down the U.S. East Coast. Curtis Foltz, executive director of the Georgia Ports Authority, claims in a recent article by Inbound Logistics that two changes are likely: “First, freight coming out of Hong Kong and mainland China has artificially migrated to the Suez because of economies of scale with larger ships that are coming to the East Coast. Once the Panama Canal expands, that will revert back to the Panama-serviced route,” and “secondly, the canal will gain market share via intermodal freight that’s currently moving from the U.S. West Coast to the East Coast.”
As always, there are differences in opinion on how the canal expansions will affect the current trade patterns but one thing is clear: significant change is happening at ports across the United States as 10,000-TEU-plus vessels begin to become standard. The canal is expected to be fully completed by early 2016.