After a nine-year construction project costing $5.4 billion, the new Panama Canal channel and locks opened, doubling its capacity in this important transit between the Pacific and the Atlantic Oceans. The canal will now host 42 vessels a day and by 2020 that number will increase to 51.
Post-Panamax vessels -- supertankers and container ships capable of holding 14,000-18,000 TEUs -- with drafts of 50 feet, beams of 160 feet and a 1,200 foot LOA, can now make trips between Asian markets and eastern seaboard ports more cost effectively. Travel time for these huge vessels will be cut from 34 days around the Cape of Good Hope in Africa and from 31 days utilizing the Suez Canal to only 20 days. As a result, major shipping lines are rerouting service to transit through the canal.
As reported in the Wall Street Journal, by 2020, the expansion of the canal will move 10% of Asian market container business from West Coast US ports to East Coast facilities. Billions of dollars have been invested in East Coast port infrastructure to take advantage of this opportunity. The American Association of Port Authorities estimates that almost $155 billion will be spent to accommodate larger ships over time; South American ports are also increasing their capabilities.
In the US, east coast ports like Boston, Baltimore, Miami and Norfolk have upgraded their facilities to accommodate bigger ships. Other ports are working on infrastructure upgrades, such as New York-New Jersey, Fort Lauderdale, Charleston, and Savannah, but face challenges. Savannah, for example, has an ongoing dredging project, but is authorized to only 47 feet; the bigger ships require 50 feet. In New York and New Jersey, the Bayonne Bridge will need to be raised in height by 60 feet for Panamax vessels, a project with a $1.3 billion price tag. That project is expected to be completed by the end of 2017.
The Port of New York and New Jersey has deepened over 38 miles of their Main Navigation Channel to 50 feet at a cost of $2.1 billion according to Maritime Professional.com. One advantage of Panamax generation ships is that they are more environmentally friendly, being equipped with the latest air emission control systems available. This has encouraged ports to look at benefits beyond the pure economic advantages of the larger vessels.
The Journal of Commerce reports that the Port of Charleston and the state of South Carolina will combine to spend $2.2 billion for port expansions. These include increasing marine terminal capabilities, deepening the harbor to 52 feet, and adding inland infrastructure such as 155 foot cranes and larger wharves to handle the increased cargo load that Panamax ships bring.
In addition to marine concerns, increased traffic into ports will bring challenges to many areas of infrastructure: rail lines, roads, truck availability, terminal storage space will all require upgrades as more and more Panamax vessels transit the new Panama Canal. The general concern appears to be whether the global economy will be strong enough to support the needed funds for these investments with sufficient cargo transport in the next few years.