Maritime Administration Study Says Impacts of Panamax Will Vary, Depending on Ports' Preparations

The geographic extent of the impacts of Panama Canal expansion will depend on the capacity of individual U.S. ports and their related infrastructure to handle shifting trade flows, the response of shipping companies to port and inland infrastructure capacity development, and the adaptation of supply-chain management methods, according to a new report by the U.S. Department of Transportation's Maritime Administration on the impact of Panama Canal expansion.

Information about public and private sector capacity expansion plans, refinement of cost information, and financial considerations about the potential for funding the capacity improvements will be the subject of the next phase of the study, the Maritime Administration said.

The report said the ways that shippers respond to cost savings are an important factor in determining the impacts of Panama Canal expansion on U.S. ports.

Use of larger ships will increase the volume of containers that must be moved at each port call for those larger vessels, the report said. This will likely lead to fewer and more concentrated ship calls at larger ports, meaning higher peak loads. That will tend to favor ports that have larger capacity in container handling, storage and movement to inland destinations, it said.

The extent to which U.S. ports invest to improve vessel handling capacity and more concentrated cargo volumes could influence whether shipping companies decide to make more use of Caribbean or Panamanian container transshipment ports, it said.

The report also said more cost-effective service by the larger vessels allowed by the Canal expansion could improve the ability of some U.S. exports, like grain, coal, petroleum products and liquefied natural gas, to compete in global markets. But it said shifts in shipping patterns impacting the national transportation system will occur slowly and over time.

"Preparation is the key, and we're already seeing it," said Acting Maritime Administrator Paul Jaenichen. "Forward-looking ports are deepening their harbors and improving their intermodal connections, often with the help of the Obama Administration's programs, such as the competitive TIGER (Transportation Investment Generating Economic Recovery) Grant program."

To date, the grants have expedited seven infrastructure projects to help modernize and expand five major U.S. ports, including the Ports of Jacksonville, Miami, Savannah, New York and New Jersey, and Charleston.