The new Panama Canal may not turn out to be an economic windfall for east and west coast US ports – at least in the short term. Just as the new Panama Canal channel and locks ramp up after the June 2016 opening, shippers like Nippon Yusen, Mitsui OSK Lines and Kawasaki Kisen are expecting major operating losses ($780 million) for the fiscal year ending in March 2017, as reported by Bloomberg Businessweek. As well, at a recent conference, the CFO of Haapag-Lloyd mentioned that the shipping industry is looking at the highest ship-scrapping levels ever seen. In Singapore, one of the world's largest ports, shipping container traffic fell 8.7% in 2015 and 1.7 % in 2016, so far.
The Journal of Commerce reported a decrease in idle container ships due to increased scrapping of older vessels and charters of smaller ships. As of November 14, the website estimated that there are 363 idle ships (with a total capacity of 1.49 million TEUs, which is 7.4% of worldwide inventory). The idle ships include 90 Panamax vessels (with capacities of 4-5,000 TEUs each).
The November JOC Inland Distribution Conference speculated on a modest growth trend for 2017 to be generated by a number of factors, including the prospect of more infrastructure spending by the Trump administration and the third quarter 2016 jump in US real gross domestic product. Inland transport concerns are port concerns, too, being so closely dependent upon one another. Some insecurity was mentioned at the conference regarding the possibility that changes in global trade agreements might affect future trade.
A recent gCaptain article indicates that this has led to lowered expectations by US port operators, focussing on gradual growth, despite some gains in traffic and tonnage anticipated from shippers' new routing through the Panama Canal. Most ports have dredged to 50 feet, or are planning to, and have upgraded cargo handling equipment to process cargo from the larger vessels now capable of transiting the canal. The east coast ports expect to take some market share from the west coast ports and west coast ports expect more ships to take advantage of the time-savings in offloading cargo at their locations.
As reported in gCaptain, larger vessels have already called in at Baltimore, Los Angeles/Long Beach, and New York and New Jersey. All of these ports have invested billions in their infrastructure. In NY/NJ the Port Authority expects an annual average growth of 4%. Baltimore estimates growth between 2-5%. West coast ports expect to lose no more than 5% of their container traffic.
Although it is still too early to be sure of any growth in business, since the new canal has been in operation for less than six months, some port operators think that it is possible the new Panamax vessels will not be carrying more cargo, but simply will consolidate cargo from smaller ships for efficiency.