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THE PANAMA CANAL EXPANSION IS SPARKING CONSTRUCTION OF BIGGER SHIPS AND A RACE AMONG AMERICAN PORTS TO IMPROVE INFRASTRUCTURE TO ACCOMMODATE THEM.
|The Original Panama canal Under Construction, The Great Culebra Cut July 4, 1885 image from Wikipedia Commons|
An improved Panama Canal has been under construction for some time now and is slated for completion in 2015. The new canal will feature vastly improved channel depths, channel widths, lock dimensions and over head clearances rendering obsolete the shipping term "PANAMAX" to describe ships specifically designed to transit the canal. Once completed the "new canal" will pass much larger ships faster than the "old" canal.
No one is quite sure what this means for U.S. Gulf Coast/ East Coast trade with the Pacific region. But its pretty certain that the only ports that can accommodate such giant ships are going to benefit. Baltimore and New Orleans share a lively coast wise trade with each other and compete somewhat for various elements of foreign trade. Both have been able to handle some of the largest bulk carriers in the coal and grain trade but most of their general cargo facilities are built to "PANAMAX" standards. Other U.S. Ports have never built the infrastructure for the larger bulk carriers and have been competing as general cargo ports largely based on "PANAMAX" engineering. The looming completion of the "new canal" is spurring a spending and construction race in a number of U.S. ports to improve infrastructure to handle these larger ships when they come. Unfortunately these are, in too many cases, highly speculative investments. No one knows over time how the new trade picture will emerge. History and maritime economics however tell us that the decision to utilize a particular port may begin with the verification that your ship can navigate the channel and fit at the available berths, but there is a lot more to it than that. Interested in more details? The Washington Post just published a well researched and detailed article on these developments and it is available on line.
The link is below.
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