Friday, February 15, 2019


THE PANAMA CANAL EXPANSION WAS SPARKING CONSTRUCTION OF BIGGER SHIPS AND A RACE AMONG AMERICAN PORTS TO IMPROVE INFRASTRUCTURE TO ACCOMMODATE  THEM. BUT NOW AT BEST "Nicaragua’s US $50b rival to Panama Canal ‘going ahead slowly’ as funding evaporates and Chinese investor keeps low profile" Full Article in: South China Morning Post  (2018)

File:The Panama Canal -- The Great Culebra Cut.jpg
The Original Panama canal Under Construction, The Great Culebra Cut July 4, 1885 image from Wikipedia Commons 

 In  January of 2013 we introduced our readers for the first time to our analysis of the potential ramifications of a new Panama Canal.  On August 22, 2013 we updated you a bit on the continuing development.   An improved Panama Canal had been under construction for some time at the  time of our reporting and was slated for completion in 2015, that of course didn't happen. The new canal if ever completed 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. But, this Chinese sponsored project seem to have run out of Chinese money. The Nicaragua canal authority doesn't have the money to build the canal and never will if dependent on the Nicaragua economy but they are continuing work at a snail's pace while trying to find new sponsors in China. The Canal authority is also starting to meet environmental movement resistance at home. We link you to the full story from the SOUTH CHINA MORNING POST  on progress into 2018.  Below you can read in excerpts from our August 2013 report about the impact of such a canal on US shipping, especially along the Gulf Coast if the canal is ever built.  As we look at progress through 2019 the question seems to be will it ever be built? 

 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" was 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 links below are to more recent press and trade journal coverage.

Panama Canal expansion spurs railroads, ports to prepare for new business -Article from Progressive Railroading

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