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Double-Wide: Who's Set to Benefit From the Expanded Panama Canal?


The historic renovation could be a boon for US ports, but right now the US is falling behind other global players.

MINYANVILLE ORIGINAL Since it was first opened in 1914, joining the Atlantic and Pacific ocean, the Panama Canal has been a vital throughway for global trade. But with the massive sizes of modern cargo ships – the World's largest is the Emma Maersk at 1,302.6 feet long by 206.6 feet wide – the Panama Canal is generally regarded to be a tight fit. That is until 2014 when the 50-mile canal is slated to receive a long anticipated third lane. It's being called a "game changer," but whom can we expect to be the big winners?

The expansion will drastically increase the amount of cargo able to travel the canal at a single time. According to The Bulletin Panama, a Panama-based newspaper focused on logistics news and information, the expansion will cost $3.2 billion and will expand the container capacity of a single canal-bound ship from 4,400 to 12,600. The Seattle Times reports the expanded capacity will actually be as high as 13,200 containers, which will travel on ships as large as 1,200 feet long and 160 feet wide. This is more than twice the size of ships previously capable of crossing the canal.

Vessels that are specially designed to travel through the Panama Canal are known as Panamax ships. Their dimensions are maxed out using specific and often inefficient designs to fit the Canal's two original channels, which can accommodate ships no larger than 965 feet long and 106 feet wide. Post-Panamax ships are those capable of fitting the Canal's expanded third lane, they're much larger and much more fuel efficient.

One of the largest costs in shipping bulk goods between the Americas and Asia is fuel. Up to 16% greater fuel efficiency is just the beginning of the benefits post-Panamax ships could potentially bring to the United States. It's estimated that three-fourths of the new cargo traveling through the expanded canal will arrive on the East Coast, which would be a potential boon for US trade if only the United States were better prepared.

The Problem With American Ports

Aaron Ellis, the director of communications for the American Association of Port Authorities, explains in USA Today that thanks to naturally deep waters, the only US ports currently "in position" to receive post-Panamax ships are Baltimore and Norfolk, VA. New York Harbor should hopefully be ready too, although this depends on whether or not the Bayonne Bridge in New Jersey, part of the New York Harbor, can be raised 64 feet by 2014.

What's left is a majority of ports along the Eastern and Southeast seaboards and in the Gulf of Mexico at various stages in updating their facilities.

In June, the US Army Corp of Engineers submitted a report to Congress that estimates seaports in the Southeast would require up to $5 billion to deepen their shipping channels to accommodate post-Panamax ships, which can reach as deep as 50 feet. According to the Corps this is "critical" if the United States wants to be able to receive ships expected from China and the rest of Asia. But at the time of the report, none of these Southern ports – including Charleston, Miami, New Orleans, and several other Gulf ports – had moved past discussions and engineering studies, and none had begun to dredge their waterways.

The report also highlighted a number of vital factors that will remain uncertain in the years following the Canal's completion. These issues include the number of post-Panamax ships able to dock in US ports, which of these ports will be able to handle them, and the amount of cargo these ships will be able to carry into the ports able to receive them.

It's no surprise then that soon after the report was released, President Obama issued an executive order to expedite the dredging of harbors along the Eastern seaboard. This has been credited to the lobbying efforts of South Carolina Governor Nikki Haley and Georgia Governor Nathan Deal. Provisions of the Clean Water, Clean Air and Endangered Species Acts have been waived for the sake of readying American ports, and expedited updates have been approved for the ports of New York, New Jersey, Miami, Jacksonville, Savannah, and of course Charleston, which will now be completed by as soon as 2020. That's four years earlier than previously expected, which of course is still six years after the opening of the expanded Panama canal.

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