Post-Panamax port preparation

August 2012 » Departments » COMMENT
Bob Drake

Within two years, the more than $5 billion expansion of the Panama Canal (which opened in August 1914) is expected to be complete, allowing Post-Panamax ships – including large container ships from Asia and the Pacific – to use U.S. East Coast and Gulf Coast ports. The canal expansion project (www.pancanal.com/eng/expansion/index.html) includes construction of two new sets of locks – one on the Pacific and one on the Atlantic side of the canal – and widening and deepening existing navigational channels.

The prospect of increased import and export shipping activity made possible by a larger Panama Canal has for several years spurred studies and efforts to deepen U.S. ports and develop landside infrastructure. Many port, railway, and highway projects are underway or nearing completion, but much remains to be done in the major port cities to accommodate anticipated growth.

In May, the Texas Department of Transportation (TxDOT) announced creation of a Panama Canal Stakeholder Working Group to promote port activities in state transportation planning by tackling highway bottlenecks such as bridges and links to terminals, and supporting rail investment, especially for exports. "Bringing together a broad group of experts involved in freight movement in Texas will allow us to develop a comprehensive master plan that addresses connectivity with our ports and potential expansion of export opportunities," said Bill Meadows, Texas Transportation Commissioner. "This Stakeholder Group will focus on enhancing and facilitating the flow of goods through and on our system, which does not stop at our ports but continues through our major corridors such as I-35 and I-69."

In June, the U.S. Army Corps of Engineers (Corps) submitted to Congress a report – "U.S. Port and Inland Waterways Modernization: Preparing for Post-Panamax Vessels" (www.iwr.usace.army.mil/index.php/us-port-and-inland-waterways-modernization-strategy) – examining options for future modernization of U.S. ports and inland waterways. "Post-Panamax vessels today make up 16 percent of the world's container fleet but account for 45 percent of the fleet's capacity," said Maj. Gen. Michael J. Walsh, Corps deputy commanding general for Civil Works and Emergency Operations. "Those numbers are projected to grow significantly over the next 20 years."

By 2030, Post-Panamax vessels are expected to account for 62 percent of the capacity of the world's container fleet, the Corps reported.

The Corps estimated that total investment opportunities for port preparation and related infrastructure ranges from $3 billion to $5 billion. Additionally, the Corps said, "environmental mitigation costs associated with port expansion can be significant and will play an important role in investment decisions."

In July, the Obama Administration issued a Presidential Executive Order to expedite the permitting and review process for five major port projects, including the Port of Jacksonville, the Port of Miami, the Port of Savannah, the Port of New York and New Jersey, and the Port of Charleston. Projects include deepening navigation channels to about 50 feet, constructing intermodal container facilities (including rail yards, paved areas for stacking containers, roadways for transporting containers by truck, cranes, and stormwater management facilities), and, in the case of the Port of New York and New Jersey, raising the Bayonne Bridge from 151 feet to 215 feet above mean high water to provide sufficient vertical clearance for the large ships.

Billions of public and private dollars are at play preparing port cities to profit from the anticipated shipping boom – as well as improving highway and railway connections to the Northeast, Southeast, and Midwest regions. For the second time in its almost 100-year history, the Panama Canal is significantly impacting the U.S. economy.

Bob Drake
bdrake@zweigwhite.com


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