U.S. Port Real
Estate and the New
Panama Canal
Ports across the U.S. are investing billions to either preserve or capture
market share as an expansion of the Panama Canal creates new logistics
models for the Trans-pacific supply chain.
By John Carver
The Panama Canal expansion will double the maximum size
of the container vessels it can handle by 2015. The $5.25
billion program to develop a third set of locks, considerably larger than the original locks built in 1914, will accommodate container ships capable of handling up to 12,000
twenty-foot equivalent units (TEU’s). The project remains
on budget and on schedule for a 2014 opening. Canal transit
via large vessles, Post-Panamax, is expected to lower unit
costs, providing a competitive model to move Asian goods
straight to the Eastern and Southern U.S. via its “all-water”
route. Historically, the largest percentage of such cargo has
been unloaded at the West Coast ports, connecting to rail
and over the road systems to complete the journey to inland
warehouse and distribution centers. With the new canal
operational, a greater percentage of discretionary cargo
not destined for west coast markets could find itself being
shipped instead to any number of east coast ports capable of
accommodating the larger vessels.
Los Angeles, the busiest U.S. port, is planning to spend
over $1.15 billion in the next five years, with another $4
billion in projects to be invested at the neighboring Port of
Long Beach. All this to defend their position as the nation’s
#1 port complex and to hold onto their 45 percent market
share of container traffic entering into the United States.
The Port of New York and New Jersey will similarly
complete $3.1 billion in improvements by 2014. Their proj-
ects include the deepening all of the port’s channels to 50
feet, and an expansion of its rail system and roadways. Their
bet is that the expanded canal will result in the larger vessels
calling on fewer ports, perhaps as few as 2-3 ports of call
on the East Coast. The rush is on in New York/New Jersey
to become a first port of call and secure its position in the
string.
