Panama Canal Expansion leads US Ports to Modernize

The $5.25 billion expansion of the Panama Canal — a historic 48-mile waterway which cuts a path between the Pacific and Atlantic oceans— has been set back by delays and has also seen overspending.  It’s currently scheduled opening of April 2016 will allow ships capable of carrying up to 14,000 containers, some of the biggest in the world, a quicker path to U.S. ports, particularly those on the East Coast. Cost overruns and labor disputes delayed the expansions previously scheduled completion last year in time for the canal’s 100th anniversary.

With the expansion ongoing, US Ports are busy building larger terminals and deepening harbors capableof handling the larger vessels. According to the American Association of Port Authorities, ports willspend more than $46 billion in port-related improvements through 2016.  Workers at the Port of New York and New Jersey are busy with their own 6 billion upgrade to its harbor, container terminals, rail lines, and bridges to draw the large ships. “It’s the era of big ships,” said Richard Larrabee, director of the Port Authority of New York and New Jersey. The Panama Canal “opened up the notion that we could see ships twice the size we normally do once the canal was opened. That was the real impetus for us.”

The Panama Canal Authority’s goal of keeping up with the trend of larger cargo ships has been a model for many U.S. ports “The Panama Canal is a great poster child for what the United States needs to do if we want to stay competitive in international trade,” Nagle said. With a recently resolved West Coast dockworkers strike that saw a lot of business diverted away from the West Coast, port officials at the Port of Long Beach are now building a 304-acre “mega-terminal” and 205-foot-tall bridge to accommodate the bigger ships. The $4.5 billion package of projects should be completed by 2019. However, if the larger ship operators choose to route their vessels through the Panama Canal and head directly to east coast ports, this could pose a direct threat to the West Coast Ports. “The pace at which these ships are growing is forcing all the ports to modernize and expand,” Hacegaba said, chief commercial officer at the Port of Long Beach in California.

In addition to the projects of New York / New Jersey, and Long Beach, similar projects are plans for the Ports of Miami, Mobile, and Seattle/Tacoma.

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