Impact on trade on expansion of panama canal a dissertation

IMPACT ON TRADE ON EXPANSION OF PANAMA CANAL
Dissertation

Do Not Copy/HEISENBERG/2014/ORIGINAL
TABLE OF CONTENTS
1. CHAPTER-1 (INTRODUCTION)…………………………………….……
2. CHAPTER-2 (THE PROPOSED EXTENSION)……………………….……
3. CHAPTER-3 (THE AIM AND THE NEED OF THE STUDY)…………..…
4. CHAPTER-4 (REVIEW OF THE LITERATURE)………………...……..
5. CHAPTER-5 (PROGRAM FOR THE FINANCING OF THE PANAMA
CANAL)…………………………………………….........................................
6. CHAPTER-6 (FINDINGS AND CONCLUSION)…………………….….
7. CHAPTER-7 (METHODOLOGY OF RESEARCH)……………………..
8. CHAPTER-8 (REFERENCES/BIBLIOGRAPHY)……………….……….…

Chapter – 1
Introduction
The Panama Canal was in 1914 as a result of direct investment by the United
States, channel of Panama is only controlled and managed by the United States
because construction began under the administration of the American President
Roosevelt as 1904. Geographically, channel proved to be a strategic point for the
United States in the First World War, the channel is ability, quick
dispatch American ships and the staff of the Pacific region in the region
Atlantique. More than 815,000 vessels transit the Panama Canal during the 99
years' service. The Panama Canal is with a very good service small ships during
the larger vessels, in order to any South America . The load through capacity of
Canal is continuous improvement, we see that in 2012, 333.7 million PC/UMS39
tonnes of freight transit through the Panama Canal a increase of 3.6 % in 2011. The
income of the toll rose to a large extent, reaching maximum value of USD 1.8
billion in 2012 revenue and are likely to rise in the near future, such as the Panama
Canal is constantly on the stage of the expansion. The Panama Canal grows in
phases.
In July 2009, the competent authority of the Panama Canal, the decision, Canal
capacity to ships Post-possible can, and a Panama, as a large port multimodal and
the decision of the competent authority of the Panama Canal in the extension of the
Panama fully takes over President office. Since then, the Authority has several
protocols signed understanding (EP) with the ports of the United States and the
North Atlantic coast of the Gulf on areas such as joint marketing, the exchange of
data, market studies, modernisation and improvement of training and technology
exchange. Port of Halifax was the first Canadian ports to communicate with the
signing of a protocol of the Panama Canal 19. September 2012. The thoughts of
the supervision of the Panama Canal , the Panama Canal program was a great
success for expansion could partnerships and protocols without understanding (EP)
with the main ports of the United States.
The investment that has to be made in number occur in the expansion of the
Panama Canal of 5.2 billion should be financed by several banks and other

financial institutions. The justification for 5.2 billion dollar expansion of the
channel based in the main on the perspective of the immediate lose large-scale
cases (post-possible) container ships capacity bottlenecks Canal and the growth of
electronic transpacific trades have done within. It was thought that the concern
about the reliability of the United States and ports of the West Coast terrestrial
route could be used by providing a range of water on a post-possible container
ships. The reliability of the Panama Canal is more than the distance terrestrial by
the operator of the vehicle has taken in America.
The opening of the Panama Canal in 2015 now was expected, up until recently, to
increase the Asian Freight transit through the channel with increasing quantities of
consignment for the view port in the Atlantic and inland ports in North
America. Such as the Panama Canal is development of trade between the
provinces in the Atlantic and the Pacific Ocean. Canal advanced ships will begin
Post-possible can carry up to 12 000 TEU compared to the ships of the transport
category possible 4,800 TEU. The ability of the channel but no recording extended
super post-possible or ultra -large container ships arrive on the line and
control with large air carriers could be a setback, the the authority of the Panama
Canal and the impact of these large container vessels with more than 18 000 TEU
TEU capacity on world trade routes greatly facilitated the Suez Canal with their
greater capacity compared to the Panama Canal in its extended hurdles
capacity. The Suez Canal is, however, a number of advantages, such as it is on the
main roads trade relationship in the world, and this is a very large capacity
and geographical shift in North America expect increasing quantities of goods at
ports on the Atlantic Ocean. The quantity of cargo safely increase in North
America in Ports of the Atlantic Ocean.
The expansion of the Panama Canal, the first element of Panama the strategy for
the conversion of the small countries of Central America in a regional economy
similar logistics in Singapore on the spoke in South East Asia and in the spoke in
Dubai in the Middle East. The objective of the United States is clearly the
statement above he is aiming in the area of logistics Panama spoke of the problem
of the world. The second element is the project Panama, a 3600 acre development
on the site of a former Howard U.S. Air Force as the Panama Canal might have
high strategic point for the United States in time of war than the Panama Canal

controlled by the United States and can capital to its strategy on Panama Canal in
time of war.
The former landing military is used as a other airports in the Tocumen
International Airport . Panama Pacific master plan is divided into two, several
national parks business via an international different types of parks logistics, a
Zentrum-Stadt , General masses can live, an airport shift divisions of the airport
will act as air freight harbor, green zone ( the Panama Canal competent constantly
monitor the impact on the environment resulting from the development of the
Panama Canal and the surrounding area), Forest Business Park and the hills of
kobbe. From the statement above, it is clearly that the American government
considers strategic point as an advantage of the United States and constantly make
sure development Panama Canal .
Any strategic location of the Panama Canal, stable.., and provide efficient
administrative processes to be carried out affairs provide enough support for the
development of the Panama and the surrounding area as the regional logistics of
the spoke. The Panama behind Singapore and Dubai in the quality of their work,
the infrastructure (ports and intermodal transport services), and attracting foreign
investment , because it is in Dubai and Singapore are already a large logistics
center. The expansion of the Panama Canal will undoubtedly improve the logistical
infrastructure, making Panama a lot more competition with other ports logistics in
North America and in the south. The main criteria can Panama the future
development rather than a mere transit navigation link, as initially proposed by
scientists a few years ago. The government valuable not only the development of
the Panama as the only Navigation transit link, but work together to build Panama
global region, such as the large "logistics in Dubai and Singapore .
The expansion of the Panama Canal , has a significant impact on the routes, the
development of the ports in and around Panama Canal , the distribution of goods
and a plethora of other maritime safety system in the United States. As a
consequence, increase the revenue of the state and it is envisaged that the State can
to a logistics center in Dubai and Singapore .
One of its effects, if any, that the main tracks in the rapid growth in trade in
containers, the expansion is the great ships for the transit of Canal. Since the

vessels larger could transit through the Panama Canal to the shipping companies
will be an important role, such as the quantities so what are we calling the
economies of scale. The vessel calls to the east coast of the coast of the Gulf also
expect a significant increase in the load away from the west coast congestion
Panama Canal.
Since its opening in 1914, the Panama Canal was a great success in connection
with the maritime transport between the Pacific and Atlantic oceans. Vessels,
although in Panama Panama Canal goes directly in the Atlantic Ocean and thus
efficiently offers a road commercial policy of the vessels. The people and Panama
Canal about 49 miles long and consists of artificial lakes, channels and the
locks. These channels and the hurdles are very useful by the Canal will take these
hurdles can agree with the ship and water and the level of the water can be
increased or decreased. He takes the time to Panama Canal, but the ships are able
save thousands of gallons fuel hold baggage after the reduced the operating costs
of the company in the maritime transport sector.
In the course of a given year is more than 12 000 ships through the Channel good
more than 270 million tonnes of freight. 70 % OF THE channel of 100 billion US
dollars were in containers is either to or from the United States as well as the
Panama Canal is located in the United States and the major disadvantage but only
load is used the ports of the United States in the last few years and the increased
throughput of the Panama Canal have extremely that globalisation has increased,
and there are very strong overload of the west coast of the United States
and thereby forcing the freight forwarders, the water supply for the benefit of all.
Therefore, the Panama Canal has become a significant part of the transport of
containers is under the leadership of the east coast of the United States and this
proportion is expected to increase in the near future.
During the high season it together for ships, wait for 10 to 15 days before traveling
through the channel for the process of transit through the Channel slowly and other
vessels have to be expected. As far as he can in money consignor $50.000 per day
seat in the idle to a complex system of invitation to tender. The shipping
companies offer of Transit first and pay for the Panama Canal competent so that
your ships in transit can first, and in 2006 a British oil tanker paid $221,000
(excluding the costs of transit) a qualitative leap from 83 other vessels. We can see
from the statement above on the competition in the Panama Canal a must-have for
any budget line of the shipping to save time and money. In addition, a large part of
container ships is too large for channel. channel, the major disadvantage of the

vessels to other payment for your travel through Panama Canal slightly faster than
all other ships, arrival in the port.

We see clearly in the picture above the definition of the Panama Canal and its
hurdles. Vessels that are running over the Panama Canal Canal, this street and
hurdles the vessels to transit Panama Canal and hurdles the level of water rises or
falls, so that ships can pass through Panama Canal and registration of your time
and money. But one thing to note is that ships through the Panama Canal the
Panama Canal and the payment of the additional registration fees authorities that a
ship can by Panama Canal at a given date in any page. The construction of new
locks, and expansion of the Panama Canal does not increase the global trade
system, but also the vessels can then by Panama Canal efficiently and the ships not
to be expected also to appear or that you no costs for additional Panama Canal
authorities to transit the Panama Canal. With the expansion and construction of
new vessels will be allowed on Panama Canal locks in one sense or another.

Chapter – 2
The proposed extension:-
In the course of the history of the Panama Canal many extensions have been
proposed, but until recently the plans never formalised in an adequate system. The
Panama Canal planned expansion has officially begins on 3. September . In
accordance with the supervision of the Panama Canal and the project should fall
2014 with the celebration of the 100. Anniversary of the channel. The details of the
planned expansion includes the following elements integrated:-
 The construction of two complex blockade - one on the other side of the
Atlantic, and on the coast of the Pacific - each with three chambers
comprises three water saving coalfields (that is to say, a new way of
Navigation); this more on each side ( D are two sides)
 The excavations and new means of access for new hurdles and the
enlargement of the possibilities of shipping;
 Deepening of the approach of the shipping industry and raising of the Lake
Gatún) as they travel, the altitude of the maximum use.
The design of a capacity expansion will cost approximately $5.2 billion and will be
financed by a sophisticated-toll as well as funds abroad.

Chapter – 3
The aim and the need of the study:-
The main objectives of the study are as follows:-
 For the determination of the substantial change of the flows of Panama
Canal.
 SUCH AS THE EXTENSION OF THE Panama Canal is directly or
indirectly on the container bulk SEC and trade oil tanker.
 To test the program on the extension of the United States its Panama Canal
 To answer the question, "Is it correct that the extension of the current
Panama Canal are proving to be a game improved for containers, bulk
materials SEC and tanker trade?"
 As Panama Canal be used strategically by the United States?
 The changes to the project could in world trade.
 The expansion of the Panama Canal had an impact on the transportation and
logistics industry?

Chapter – 4
Review of the Literature
The Panama Canal Expansion: potential impact on the logistics and supply
chains
By around C. Sanchez, Office for research and market analysis, June 2012.
http://caribgrowth.competecaribbean.org/content/OnesimoSanchezKingstonpanam
acanaljune2012_.pdf
The construction of the Panama Canal proved to be a game improved in world
trade.
 From 1915 to 2011
 Nbre total journeys:- 1,015,656
 Freight:- 8,810,111,605

Expansion of the Panama Canal potential impact on Asia - East Coast/Gulf
trade
Rodolfo sabonge, Vice President of Marketing, Research and Analysis office
authority of the Panama Canal
http://www.fhwa.dot.gov/planning/freight_planning/talking_freight/talkingfreight1
0_21_09rs.pdf
 Panama Canal 50 nautical miles (80 km length between the Atlantic and the
Pacific Oceans.
 Lake Gatún) as they travel to 85 feet (26 m) above the level of the.
 The water used for increasing and reducing the fishing vessels in each series
of locks is of the Lake Gatún) as they travel through heavy (approximately
52 million gallons in the transit system)
 The Republic of Panama moved at noon 31. December 1999.
 Relationship with Panama Canal boat the maximum length of 965 feet (294
m), depth maximum of 39.5 feet (12 m) and bundle not more than 106 feet
(32.5 m).
Users FY 2007 FY 2008 FY 2008
( %)
United States 136.8 133.7 64
China 43.7 43.7 21
Chile 22.0 26.7 13
European Union 26.5 26.1 12
Japan 29.2 24.7 12
South Korea 17.3 17.3 8
Peru 14.1 14.1 7
Large ports worldwide network connections via services as the transit of the
Panama Canal and/or appeal is to port:-
 Antwerp
 Arica
 Auckland
 Antofagasta
 Altamira, MEX
 The Balboa
 Baltimore MD
 Barcelona

 Barranquilla
 Bilbao
 Boston My
 Büsum
 Brisbane
 It
 Pusan
 Callao.
 Cartagena
 Dubai Jabal Ali
 Felixstowe
 Freeport, Bahamas
 Halifax
 Hamburg
 Havana
 Hong Kong
 Houston - TX
 Jacksonville
 Long Beach
 Los Angeles
 Melbourne
 Miami
 Mumbai (World Nhava Sheva)
 Mundra
 New York
 Ningbo,
 Oakland
 Osaka
 Port Pelabuhan Kelang
 Port of Spain
 Port Said, Egypt
 Rotterdam
 Shanghai
 Sydney
 Tokyo
 Tuticorin, India
 Vancouver, C. -B.

 Xiamen.

The Panama Canal Expansion: business as usual or improved?
Dr. Jean-Paul Rodrigue, Hofstra University, New York, USA, & Dr. Theo
notteboom, President itmma, University of Antwerp, Antwerp, Belgium
http://people.hofstra.edu/jean-paul_rodrigue/downloads/PT51-10_3.pdf
2014 The Panama Canal will be celebrating its centenary, an event that not only
facts, but also corresponds to a new phase of the business, according to the plan
when it is estimated at US$ 5.25 billion dollars for the expansion project is new
series of locks and ancillary equipment (dredging projects and extension) the act
12 000 TEU container ships in the -15.000 after for the design of ships and loading
the configuration. That is certainly what impact on world trade, and large vessels in
bulk Schiffe-Mutter could via this channel. This triggered a wide range of
speculation, from a "change game " event essentially a overall effect distribution of
goods a wide range of assessments, the extension had been little or no appreciable
impact. This is the divergence stresses that global distribution of the goods, the
strategy of the companies of the maritime transport and the operators and
management of the supply chain are has become so complex and interdependence,
it is difficult for a large number of stakeholders such as the expansion is step-by-
step . While we know, it is very easy to do so, such as the operational features of
the channel be expanded, it is supplemented by a lot remains uncertain is-in-, trade,
Lfrs shipping configurations network and the growth in the volume of
transhipment in the region. It is also foreseen that the Panama Canal can grow as
the transhipment of spoke world, such as in the Atlantic and retrieve it in the
Pacific, where the loads/containers and the transhipment takes place in the Panama
Canal.
The problem for the assessment of the potential impact of such a project is to
increase the capacity in reality the consequences are lack and require the impact of
feedback, some of which can even unforeseen consequences. There are so many
unknowns in this equation is to say how the different actors will react and to what
extent, the variety of convergence and of the different strategies leads to the
performance of the dispatch. For example, how do you the strategic importance of
Asia in the Pacific Ocean, north American trade segment will be repaired? As the
load is divertible the west coast, the east coast, due to the distance from the water?
The extent to which North and Sud-Amerikaner importers and exporters will be
provided for the availability , the cost and reliability of services in the Post-area
Expansion? In the extent to which transport costs will be reduced?

It is also clear that the enlargement of the Panama Canal is a game improved, but
the new rules of the game are not clear. This article contains a summary a funded
study of the Van Horne Institute of the University of Calgary. This is an attempt,
light in the key factors have an impact on the results of the global expansion of
transport networks and trade flows. It focuses on the macro-economic factors, in
particular , it provides for the world as a whole, and the report includes the impact
of the enlargement of the Panama Canal on world trade, in particular, the expected
changes in the structure of the production of the industry operating factors can
extend the maritime transport is to say economies of scale and bake slowly and
competitive factors, such as other transport chains can anticipate and respond to
changes by the enlargement, in particular the cost structure.

Impact of the Panama Canal the extension of the distribution networks
Fortna, www.fortna.com
http://www.fortna.com/whitepapers/Article_Viewpoint_PanamaCanalExpansion_F
INAL_EN.pdf
The long-awaited Panama Canal expansion, the draft will be completed in 2014, is
qualified " Don improved" is the transformation of the supply chain distribution
networks. Enlargement brings enlargement of the locks, for the treatment of large
vessels and after channel pontifes, change how are transfer from west to east.
Shipping on the Panama Canal could be a risk if the normal trade road
disturbed. The freight forwarders may remember Los Angeles lockdown 2002
want to limit your risk. But the real issue is the long-term effects of the Panama
Canal as a supplier gradually source differently. For example domestic kingdom of
the Host Party many clothing from individual suppliers, the increased, partly due to
the traditional water commercial streets. In the course of time the Panama
Canal expansion could be the provider of a re-assessment of their supply chains to
best customers as their customers. The Panama Canal is the best possible way. The
customers can consignor, importers, transporters, such as the number of drops and
you will be taken to freight transport of their products to the end provisions very
easy. You talk about their major customers for retail sale for the understanding of
the distribution of the demand letters anywhere in the United States, indicating
whether or not it is incumbent upon,, the imports of certain West Coast, certain
east coast) whether the east coast road in the water quantities justify a
comprehensive Panama Canal.
The line of the low are the fluctuations in the demand for food and in various
sectors of the transport industry is one of the price volatility and the creation of
opportunities for the carriers, benefit of the additional competition on the inclusion
of the whole trade in water way of the east coast. Logistics and transport costs for
certain basic products could suddenly fall and new markets and commercial
opportunities. But this potential dynamism of Teams slowed down somewhat by an
economic slowdown.
And, of course, the real winners are the ports of the East coast, the recording of the
largest ship ready from road transport, the airlines as a service port and place this
radius of 3pls, if they begin to prepare themselves now.

The potential impact of the Panama Canal expansion and development post-
possible /Super Post-possible ship container routes on Michigan freight and
logistics of the spoke
August 2013
J. D. Snyder Kevin Doyle
http://knowledgeplanning.org/upload/Panama%20Canal%20Expansion%20Paper
%20%20FINAL%20AUG%2030%20w%20authors.pdf
The current trends in the logistics in the maritime transport sector can be used to
create the possibilities of supply chain and logistics development spoke in
Michigan. Direct Current trends in the field of logistics and the supply chain
industry to Michigan a logistics center of America. Section describes the logistics
in the maritime transport sector trends with a focus on Asia trade on the world
market on roads in development; the supervision of the Panama Canal and
extension Canal ability to think Recording post-possible container ships, the
potential impact of the extension of the channel and the transition road commercial
ports in the Atlantic and impact on the logistics of the Michigan; the potential
impact of the Arctic opening streets of the trade as a result of the reduction in the
melts of the global climate change and what are the most important changes may
occur as a result of the enlargement of the Panama Canal.
The expansion of the Panama Canal, the first element of Panama the strategy for
the conversion of the small countries of Central America in a regional economy
similar logistics in Singapore on the spoke in South East Asia and in the spoke in
Dubai in the Middle East. The second element is Panama draft Pacific, a 3,500 acre
development on the site of a former Howard U.S. Air Force basis. This line we can
be sure that the United States will close this Panama Canal as a strategic point in
time of war. It is development of the region not only to improve the logistics but
also for the position of the war.
The research and investigations in accordance with the provisions of this document
have been designed for the understanding of the changes planned for the future
Global Freight patterns as a result of the enlargement of the Panama Canal and the
use of post-possible (and super post-possible) ships and their impact on the
Michigan freight and logistics hub. On the basis of a short review of the literature
and semi-structured interviews with North America Atlantic ocean port authorities
and experts for the logistics, our main conclusion is that the changes in the freight
Asian models could a significant increase in the quantity of the goods in North

America in ports in the Atlantic ocean, but the impact of the Panama Canal
Expansion on these ports should be low (paragraph single annual increase). It is
clear: if there is a change of the tariffs were in the whole of the Asian continent- ,
there is a huge expansion of trade on Panama Canal, the Panama Canal
connections directly with region of Asia.
It is increasingly clear that Super ships Post-possible to a large game for improved
global maritime transport and logistics because of the concept of economies of
scale. But it is not clear how these changes will play in the future, except that the
science of logistics hubs are being developed and refined with intermodal what is
much more on the world market.
The body of engineers of the U.S. army also has the uncertainty regarding the
future impact of the Panama Canal expansion of US ports and volume of the
dispatch and reasons in response to a request of the congress with a study. Such
as.. Changes to the planned expansion can now a hault, the main reason is a
political instability in the country. The choice, the impact on the extension of the
channel and changes in the structure of trade is carried out by a variety of actors in
the private sector (the consignors, the transmission lines, providers of logistics,
ports and other). As your data, the deliberations and decisions not divided, the
accuracy of the trajectory of the total size of the decisions is not clearly predict or
just as it is impossible for us is very precise and clear prediction of future freight
rates but despite the uncertainty about the impact of the Panama Canal enlargement
spoke of the Michigan logistics, the state appears, are strategically benefit from
other parts of the world trade from the use of large container ships and the
transition from trade routes Asia with the help of the Suez Canal.
This document is intended to make a modest contribution to the discussions of the
State and the regional logistics spoke and strategies for planning. At the beginning
of this year, MSU dfge Team of the project has two regional logistic strategies can
contribute information to the global approach. The key to success is the use of
more efficient state of its far-reaching resources knowledge and resources and the
exploitation of the knowledge of the status of the most important higher education
institutions in order to ensure that regional strategies to the state as a logistics
center. Multi-sectoral and multi-judicial cooperation significantly to the
right.Development of public-private partnerships as a tool for the support for the
creation of solutions for the logistics and challenges in the area of infrastructure
and the position of the state of the success of the growing world
markets.Inventions and innovations to this reader during strategic process. Public-

private partnerships The best ways for the development of the region within a
logistics center.
More research needed, what the Michigan can benefit from the development of the
schedules global commercial and new trading opportunities and new jobs in the
areas of growth, in particular for small and medium-sized enterprises. More
specifically, the research for understanding the needs of the logistics and
requirements of the small and medium-sized enterprises need support with success
of the competition on the world markets. And a greater understanding of certain
foreign markets a significant step in the development of a calibration object, more
detailed information on the strategy.
The decision-makers of the state should be further efforts for the promotion of
exports of small and medium-sized enterprises in the Michigan and the various
stages to SMES can value with a lower cost for the dispatch partner the team the
route now that the trade seem to North American exports. Michigan decision-
makers should also the various stages for a better position, the capital of the state
of the export and market opportunities associated with new world markets,
particularly in South America and Asia (including China, Korea and Japan) and
South East Asia is provided (including Vietnam, Singapore and Indonesia). The
Michigan allowed the benefits companies only if measures taken to ease the export
and import policy by the State, and the extension of the Panama Canal is the
complement of the benefits resulting from the reduction in freight rates and more
traffic hour for Panama Canal.

The impact of the Panama Canal expansion of ports of the United States and
coastal economic analysis
Kevin Knight - Institute for Water Resources
http://www.iwr.usace.army.mil/Portals/70/docs/iwrreports/WhitePaperPanamaCan
al.pdf
Ability of the expanded Canal:-
Insight global forecasts of 2025 Canal transits pcums, revenue, and cargo tonnes
long shows that the forecasts are consistent with the assumptions of the World
Trade model the trade flows, expectations of the tariffs of tolls in the time of
changes of the fleet including the competition of the container, and the way the
costs of mediation. Several reports have shown that the construction of a third
game reasonably locks of the channel , to 600 million pcums, almost double as
much as possible current sustainable capacity.
Load growth:-
In the most likely scenario of the application creates the ACP States, cargo should
increase by an average of 3% per year and a doubling of the 2005 tonnage in 2025.
The interest rate is largely in line with the World Trade forecasts, but this far
below the expected value 6.9 % growth in the container trade in the course of the
next 20 years.

Panama Canal Expansion study report of the level I: the development of trade
and the economy, and the World
November 2013
www.marad.dot.gov/.../Panama_Canal_Phase_I_Report_-_20Nov2013.pdf
The Panama Canal is an important part of the world trade can take approximately
five percent of global scope cargo. One of the largest construction projects in the
world, the Panama Canal expansion could have a significant impact on US ports
and terrestrial infrastructure. The Panama Canal materially affect the trade flows
of America. Expansion of the Panama Canal, for the transition from
largest container ships, potentially reducing the cost of shipping by the Trans-
Ocean was to reduce the rate of freight transport, in particular for commercial
services provide westbound routes between the Far East and the United States and
ports of the coast of the Gulf of Mexico, which is especially important for the
container shipping services have developed in the past half-century the trade
between Asia and the western countries dominate request came Panama Canal.
United States exports of goods containers and bulk goods these regions also
transported through the Panama Canal, especially agricultural products are
shipped from the United States of Asia ports of the coast of the Gulf of Mexico.
more profitable services with the help of the tall ships in the innermost the
excluded, could improve the capacity of certain of the support of the US-exports
competition in world markets for agricultural products and energy. The prices for
agricultural products will be competitive, the freight rates are on the decline and
we will be involved in the sale of their products the location at competitive prices.
Panama Canal extension will be the conversion of vessels size. The competent
authority of the Panama Canal (PCA) keeps the interaction allow between 12 and
14 large vessels daily in the new locks and using the existing locks for smaller
vessels, Canal dual capacity. The increase in the size of the ships, in particular in
container ships with a capacity of up to 13 000 TEU- play a decisive role in the
Extension Canal flow capacity of 300 million tonnes 600 Million pcums pcums
tons.
The present report focuses on the illegal lines, a segment of the Panama Canal
traffic the best see economies operating costs due to the enlargement. There are,
however, other foods such as cereals exported American defended and new
opportunities for the export, such as coal, crude petroleum and petroleum products
and liquefied natural gas (LNG), can also be able use expanded Panama Canal,

especially if port of the golf of the United States are to cope with large vessels. The
United States is to import coal from Australia and Indonesia in the lower interest
rates as a result of the enlargement of the Panama Canal.
On the basis of a research work on this report, the potential impact of the Panama
Canal the extension of the external trade of the United States are as follows:-
 The air carriers operated directly all the waterways between east coast of the
United States and the Gulf States and ports foreign ports (in particular in
Asia and the West Coast South America) could be more comprehensive and
more efficient competitive services in use by the channel fleet.
 The transition from 5 000 TEU vessels of up to 13 000 TEU Asia in the
north-east - U.S. East/Cote Golf roads over the Panama Canal can savings
for the carriers; however, a significant amount of the transport cost savings
associated with the use of ships of the size should be absorbed by the
providers of important services.
 As the average size of the vessels operated port on the west coast also
increases with the time of an average of 6 000 TEU per ship today on 13 000
TEU (or more), the cost of transport from ports on the west coast of Asia
would also be reduced, with a part of this economies on the freight
forwarders as passed.

Impact of the expansion of the Panama Canal to US regions:-
The effects of which can significantly different geographical region and the nature
of the product being transported. The study shows the areas in which the United
States, where net cost of reductions hardly affect trade. The study also shows
regions that have a large proportion of their imports from Asia, in particular for
products of low value, via the Panama Canal. These areas will benefit, the most
reductions of the associated costs to the channel of the expansion.
The geographical area of the impact of the Panama Canal expansion depends on a
number of factors, in particular: the ability of individual ports of the USA and its
infrastructure to cope with the transition trade flows, the response of the shipping
companies in the ports and terrestrial infrastructure capacity building, the
adjustment of the supply chain and use methods for the management of economies
of scale offered by the channel enlargement and the distribution of the economies
of the costs between the different domestic and foreign players.

Panama Canal expansion program - March 2013
www.pancanal.com/eng/expansion/rpts/components/2013.pdf
Program to expand Components:-
1. Post Panama suggest:- construction of the new in the Pacific Ocean and
the Atlantic locks for ships Post-possible transit journeys. Each complex
consists of three chambers, three water saving coalfields by chamber side
and as a filling system for the draining and eight rolling gates.
2. Pacific Ocean & Canal access: - for a new canal for networking of the new
Pacific altogether with Corte Culebra. The project to almost 50 million cubic
meters of materials. She was divided into four phases, the first three have
already been completed.
3. Derdging ways of Navigation - the deepening and widening of the
possibilities of the navigation at sea entries for channel, Corte culebra and
Gatún) as they travel, Lake.
4. Improvement of the water supply: -the increase in the size of the Lake
Gatún) as they travel, work a maximum level for the improvement of the
water supply to the channel for food and draft of the reliability.
Since September 2007, 6.1 kilometers long Pacific Canal access, the parallel
to ( lake, but separate is currently to the networking of the new hurdles on the coast
of the Pacific and the Corte Culebra. The design, requires the withdrawal of 50
million cubic meters substances, was divided in four phases, where the first three
have already been completed.
Consortium ICA-FCC-Meco, instructs the fourth phase was the depth required for
the deep draft Navigation Vessels along the canal and continue with the
construction of a dam 2.3 kilometerlong necessary to compensate for the 9-meter
difference with ( Lake.
Activities under this project have been also the deletion of 400 hectares of
contaminated land of unexploded ordnance (were) left by the US military in their
use in the territory of the Panama Canal.

The Panama Canal dredging now

The Panama Canal extension and port of a Member State - Special Series
Report
http://www.slcatlanta.org/Publications/EconDev/ports_web.pdf
Background The trends will continue to play an important role in the
understanding of the role of the Panama Canal, a highway for trade not only with
the transfer of the goods to and from the United States, but also in the entire world
trade. If the Panama Canal a formal doors in 1914, the new capacity of ships
traveling with a facility between the Pacific and Atlantic Oceans mentioned an
important impetus in the context of international trade and shipping routes. That
was the most important American President Roosevelt has been force behind the
completion of the Panama Canal, the 50 nautical miles long canal of the bissectrice
Panama after all the nation thousands of workers often obliged in accordance, work
under the terms of this Agreement such difficult conditions. It was 34 years and
639 million dollars in 1914, finally, by the time of the introduction in the years
1930, proposals for an extension of the channel with the introduction of a game
more hurdles the momentum generated. But for a variety of reasons, there is no
real movement in this Front during the six or seven decades. The Treaty Carter-Pau
, signed by President Jimmy Carter in 1977 for determining the level of the
Panama Canal and all of the properties in the context of be relocated again in the
Republic of Panama by the United States before the end of the century. The
transfer took place peacefully in 1999.
The time before and after the full control of the Panama Canal Panama coincided
with a huge increase in globalisation and the role of the increasingly important role
of China in the world trade system. growing number of ships in transit through the
Panama Canal (mostly were entrusted from China), at the side of the traffic jams
growing blockages and delays of ships, the demands for an extension of the
channel. The delays were not unusual for such a comprehensive it ships with, they
will have to wait for up to 10 days in high season in the amount of tens of
thousands of dollars per day transit of the canal. Therefore, the decisions can be
taken quickly on an extension of its takeover by the Government of Panama and,
later, in a referendum by the end of October 2006 with an overwhelming majority
of the people. After the vote in September 2007, the preparatory work on the draft
expansion, with a first estimate of the costs 5.25 billion dollars, although there are
more a recalculation almost USD 10 billion) initiated.
Basically the extension of the Panama Canal includes the key elements:

 The creation of a new way of transport along the canal in calculating
constructed two locks on the other side of the Atlantic, and on the coast of
the Pacific Ocean with three chambers, including three water saving
coalfields ;
 Excavating new channels access to new hurdles and the enlargement of the
possibilities of the shipping industry;
 Deepening of the approach of the shipping industry and the raising of the
Lake Gatún) as they travel, * Maximum amount of work.
FACTORS , the Panama Canal effort to expand:-
In addition, expected increase in world trade in the next few years there were
several factors lead the expansion of the Panama Canal. This comprised the
following elements:
 The objective of the use of the extended channel (and the foreseeable
increase in the maritime transport) as the most important mechanism for
fixing the high economic growth and generate enough wealth to the internal
drive determines Panama in the ranks of the advanced economies.
 The fact that the concentration in the industry of shipbuilding to build
increasingly larger vessels - for the creation of economies of scale - the
tendency is to the end of this decade, in spite of the slowdown in world trade
temporarily due to the great recession. Maximum size of the vessel may pass
through the Panama Canal in industry as a ship .

Report of the Panama Canal working group consisting of representatives
from the participating.
November 2012
http://ftp.dot.state.tx.us/pub/txdot-info/panama/final_report.pdf
The Panama Canal in years 5.25 billion dollars for the enlargement is expected to
be completed in early 2015 or 2014. The new hurdles will be added in the context
of enlargement the largest recording and larger ships. More than these vessels Post-
possible , the expansion is today a reduction of congestion in locks, allowing more
reliable and faster time for the transit of ships of all sizes. The hurdles wider this
recording of liquefied natural gas (LNG) carriers do not use channel today.
The expansion of the Panama Canal a impact on world trade, including impact on
Texas ports. Texas) Ministry of Transport (in Texas) formed a working group
consisting of representatives from the participating Panama Canal (pcswg) at the
beginning of 2012 and will host a Study Research Texas A&M transport Institute
(also) for the assessment of the possibilities the Panama Canal for the extension
and study of the potential impact on Texas ports and terrestrial infrastructure,
including roads, railways and the equipment terminals. The pcswg has been
charged with examining short-, medium- and long-term improvements in Texas
carriage, better use of the position of the State of Texas for the extension and
improvement of Panama Canal Texas' role in the world trade.
The Panama Canal connection criticism in global system of maritime transport.
Open in 1914, 51-mile Canal connects in the Atlantic, Pacific in the Isthmus of
Panama. The channel is currently in years 5.25 billion dollars for the extension,
should be at the end of 2014 or beginning of 2015. The Panama Canal enlargement
is to the influence of the nature of the consignment. The extension of the channel
along the population growth and the development of energy in Texas, provides
opportunities for the development of world trade Texas port.
The opening of the Panama Canal in 1914, by making a connection between the
Atlantic and the Pacific in the Isthmus of Panama. 51-Mile channel has
significantly improved the global maritime transport system with the vessels no
longer travel to the top of the South America to Asia. Property of the channel was
in Panama 1999 transfer of the United States as a result of a change of the
company model for the operation of a public service a trading company.

The competent authority of the Panama Canal (PCA), operates channel has
extensive work to modernise and an investment program. The transition from a
2006 referendum in so far as funding requirements for a extension violence of the
channel. The objectives of the program include the expansion to maintain the
competitiveness of the channel and the value of the street, to increase capacity and
allow ships size and reducing water consumption. Further aims are to improve the
safety and efficacy and the maintenance of the tonnage and increase profitability.
The new hurdles will be added in the context of enlargement the largest recording
and larger ships. The ceiling of the ship size increases from 5 000 20 ft equivalent
(TEU) 13 000 TEU with the extension. More Accommodation this large fishing
vessels Post-possible , ships of all sizes are the experience faster and more reliable
transit time due to the reduction in congestion in the hurdles. In addition, the
hurdles can include wider is liquefied natural gas (LNG) tankers, which are
currently not use of the canal.
The impact of the Panama Canal expansion of world trade and ports of the United
States continued discussed and analyzed in detail. For many owners and non-
owner models are used in this process. There are different schools worry about the
consequences. Some claim that it hardly changes logistics patterns worldwide.
Others are in favor, it is a change of the ships largest maintenance East Coast and
ports of the coast of the Gulf of Mexico. Others have proposed that new
transhipment centers be developed Jamaica or other locations of the Caribbean.
The east coast ports, including New York, the savannah, Miami, are extensive
investment in the deepening of the harbor and combat SEP improvements of the
infrastructure for the inclusion of the largest ships in the future.

Chapter – 5
Program for the financing of the Panama Canal
The financing of the program listed below is the Panama Canal - 9 December
2008:-
The 2.3 billion dollars financing programs include a part of the 5.25 billion dollars.
Total cost of the project will be assigned as follows:-
 European Investment Bank----------------------------------------------------500 m
 Bank of Japan for the international cooperation----------------------------800 m
 Inter-american development bank--------------------------------------------400 m
 Society International Financial------------------------------------------------300 m
 Corporación has de Fomento (CIF) -----------------------------------------300 m
 ACP----------------------------------------------------------------------------2,950 m
 ---------------------------------------------------------------------------Total 5,250 m
The locks of the Panama Canal:-
 The vessels with a maximum can receive up to 4 400 TEU.
 Length 294.1 m
 Bundle of 32.3 m
 Traditional hurdles may manage more than 304.8 m
The new locks of the Panama Canal:-
 Can receive up to 12,600 TEU vessels with a maximum
 Length 366 m
 Bundle of 49 M.
 The new locks will be able vessels maximum up to 427 M.
 The saving of water catchment areas use new lock is 7% less water supply
and existing locks.
Forecasts:-
 In 2010, the Panama Canal Treaty 6.6 million TEU
 2015 The Panama Canal is to deal with 8.4 million TEU

CHAPTER – 6
FINDINGS AND CONCLUSIONS
The Panama Canal is currently undergoing an expansion project that will allow
larger ships (10,000 or more Twenty-Foot Equivalent Units (TEUs)) to pass
through, and will increase the Canal‟s annual capacity by more than 75 percent
when completed in 2014.
After the Panama Canal opens (projected for 2014), it is projected that the number
of containerships and bulk carrier transits will actually fall as larger ships displace
smaller ones. Yet the total cargo – in TEU or Panama Canal/Universal
Measurement System (PC/UMS) tons – will increase. While the demand for trade
freight movement through the West Coast is expected to remain substantial in
coming years, the West Coast ports face physical constraints to their expansion, as
well as a growing number of labor and community restraints. This may result in
significantly more cargo being brought into Texas ports; in particular, from cargo
diverting from the increasingly congested West Coast ports.
In 2008, Texas ports handled 61 percent of all foreign imports to U.S. Gulf Coast
ports (261 million tons) and 40 percent of all U.S. Gulf Coast exports (92 million
tons).1 The Panama Canal Authority has estimated total volumes transiting the
new Canal will reach 508 million tons in 20252. Even if this growth is just evenly
distributed, Texas ports can expect to receive an additional 6.6 million tons of
cargo arriving from the Pacific via the Canal, and to export an additional 15.0
million to destinations in the Pacific. In reality, shifts from West Coast ports could
increase this share substantially.
One indicator that suggests that more traffic will flow through the Panama Canal to
the Gulf and East Coasts is comparing the planned capacity at ports in Asia and on
North America‟s West Coast. During the next five years, approximately 40 million
TEUs of capacity are planned at eight major Asian intermodal export terminals. By
comparison, less than 4 million TEUs of capacity are planned for West Coast ports,
including the port at Prince Rupert in British Columbia. This uneven growth
suggests that Gulf and East Coast ports will benefits from the limited capacity at
West Coast ports.
Despite the current economic slowdown, carriers have continued to place orders
for 10,000 TEU plus containerships, which will initially service Asia-Europe

strings. These vessels will displace existing 6,000 to 8,000 TEU ships will be
relocated to routes served by the Canal, including Asia to the Gulf, South America,
and South Atlantic ports.
The expansion is likely to have significant impacts on many Texas ports – some of
which may develop feeder services connecting them to larger hubs. In advance of
the Panama Canal‟s expansion, some of Texas‟ largest ports – including Port of
Corpus Christi, Port of Galveston, and the Port of Houston – are undertaking major
capacity enhancement projects to enhance their ability to attract a portion of the
Canal‟s new traffic.
The Panama Canal Authority (ACP) sets rates for passage based on ship type, size
(capacity), cargo carried, and whether the vessel owner pays a “regular fee” (and is
subject to delays), or a higher fee, which guarantees a time slot in the bidirectional
system. As discussed earlier, ship types are classed by their design: containers,
grains, liquid bulk, other dry bulk, cruise, ro-ro, reefer, general cargo, and others.
When the Canal functioned under U.S. authority, the pricing rule was based on a
cost-plus method, with some exceptions based on apparent social welfare factors.
ACP has been slowly rationalizing the fee structure since the Canal moved back to
Panamanian authority. It recognizes the financial support given by the State of
Panama by pricing the facility at a market basis to generate revenue for the
government – not unlike the Suez Canal Authority, which has also abandoned the
cost-plus method.
Fee Structure
Ships are first classified by type as noted above, whether the ship is loaded or
empty; and whether or not the vessel is a containership, cruise ship, or cargo
carrier. For container-ships, the capacity of the vessel is expressed in TEUs.
However, that term can be misleading, as ships are rated both on a nominal basis,
where each TEU is loaded to 14 metric tons; and on their capacity when normal
commercial conditions are in place. In this latter state, the container mix comprises
empties and a range of loads depending on the commodities carried. This raises the
TEU measure significantly as demonstrated by ships, such as the Emma Maersk,
which can carry more than 14,000 TEUs. Fifteen years ago, a typical Panamax ship
(the largest ship that can fit through the Panama Canal) had a nominal capacity of
around 3,500 TEUs. This increased to a current value in excess of 5,000 TEUs, in
part by stacking more containers on deck. The ACP wants to ensure that the fee

structure reflected both the actual TEUs carried, as well as the volumetric capacity
of the ship.
If the Canal had based its fee system solely on cargo carried, it would be
potentially disadvantaged by the trade imbalance between Asia and the United
States, in which many ships return to Asia only partially loaded. The rate effective
on May 1, 2009 was $72.00 USD per TEU of capacity, a value that is currently
under review. The toll is lower for cruise and container ships carrying no cargo
(“in ballast”), which in May 2009 was $57.60 USD per TEU of capacity. Further
planned rate increases have been repeatedly delayed due to the global economic
slowdown.
Passenger vessels (cruise ships) exceeding 30,000 tons pay a rate based on the
number of passengers that can be accommodated on a berth/passenger basis. The
per-berth charge is currently $92 for unoccupied berths and $115 for occupied
berths. This charge, which began in 2007, has greatly increased tolls on the larger
cruise ships, while those under 30,000 tons, or less than 33 tons per passenger, are
charged on the same “per-ton” schedule as freighters.
Finally, most cargo ships pay a fee based on a PC/UMS net ton basis, where one
ton is equivalent to a volume of 100 cubic feet. The calculation of tonnage for
commercial vessels is quite complex but forms the metric reported by ACP for all
noncontainerized passages. As of fiscal year 2008, this toll is $3.90 USD per ton
for the first 10,000 tons; $3.19 USD per ton for the next 10,000 tons; $3.82 USD
per ton for the next 10,000 tons; and $3.76 USD per ton thereafter. As with
container-ships, a reduced toll is charged for freight ships “in ballast.” The
magnitude of the fees for passages through the new locks is, at this time, unknown,
but they will almost certainly be derived from a market-based method,
incorporating the state of the global economy, price of fuel, and the fees charged
for similar sized ships by the Suez Canal Authority.
While the demand for trade freight movement through the West Coast is expected
to be substantial in coming years, the West Coast ports face physical constraints to
their expansion, as well as community demands that the volume of port-related
truck and rail movements and their associated congestion, noise, and air pollution
impacts be reduced.
One indicator that suggests that more traffic will flow through the Panama Canal to
the Gulf and East Coasts because of limited capacity at West Coast ports is the

planned capacity at ports in Asia and on North America‟s West Coast. During the
next five years, approximately 40 million TEUs of capacity are planned at eight
major Asian intermodal export terminals. By comparison, less than 4 million TEUs
of capacity are planned for West Coast ports, including the port at Prince Rupert in
British Columbia.
Not all the capacity of the Asian ports will be dedicated to trade with the Americas
and the recession will slow plans for capacity expansion; however, the comparison
suggests that the U.S. West Coast ports may not accommodate all the anticipated
trade, and that a significant portion of that trade could divert to the Panama Canal
to reach Gulf and East Coasts markets.
Prior to 2006, shippers sending Asian containerized imports to the U.S. strongly
relied on Southern Californian terminals – particularly those at Long Beach and
Los Angeles – and Class 1 railroads which, in turn, saw unprecedented growth
between 1990 and 2005. Around 2006, a greater number of shippers began to use
other trade corridors to move containers to the large metropolitan markets of the
Midwest and northeastern U.S., causing the Southern California ports to lose
market share.
It was estimated, using a basic cost model, that Southern California would remain
the main corridor for deliveries to Texas, unless the import industry continued to
add costs to containerized freight movements within the port hinterland. The
Panama Canal came next, followed by the Port of Lazaro Cardenas on the Mexican
pacific coast. It was argued that if Asian trade grew as predicted then all trade
corridors would be needed to carry the traffic most suited to the commodities; and
that a variety of trade corridors serving Texas was better than depending on one
single corridor, even when this was feasible.
The results are striking and indicate that a large part of the current U.S. population
can be served by larger containerships using the new Panama Canal locks, given a
moderate market-based fee structure. The results are estimates and are subject to
the assumptions and costs chosen to drive the models. But even accepting this
caveat, it appears that the Canal will prove to be a strong contender for Asian trade
serving not only the East Coast, but also most of Texas and the Midwest after
2014.
The ability of the Panama Canal Authority to stay on the multistage, critical path
construction schedule13 suggests that the new locks will be opened in 2014 – the

centennial year of the Canal. Two observations can be made about routes that will
be operating at that date. First, many will not change in the short to medium term,
2016 to 2020. This is particularly true for imports if the U.S. economy recovers
slowly. Where the demand justifies higher cargo volumes, steamship companies
will move to larger ships at some cost inflection point. The Drewry work suggests
that two inflection points are 6,400 and 8,000 TEUs for the current Panamax
containership. The displacement of ships within that broad class by the 10,000-plus
TEU ships now entering service on the Pacific and Suez routes suggests that
steamship companies will have available vessels to put on the Panama routes, if
justified by demand.
The marine shipping sector remains weak and is still struggling with the
consequence of new ships, ordered when demand was high, now being delivered
by shipyards. Data taken from a 2009 Global Insight webinar described the
situation that the industry faced at the peak of the overcapacity crisis. The second
observation is that, if routes change because of larger ships, the shape of the routes
– particularly the number of port calls – may diminish. The final section considers
some of the key characteristics of post-2014 Canal routes.
Due to the cost, time, and supply chain implications of modal selection, shippers
are generally conservative when it comes to switching transportation modes.
Therefore, as a general rule, shippers will change routes and ships incrementally
and carefully. Economies of scale can profoundly reduce ton per mile cargo costs,
irrespective of cargo type or mode. Trains, planes, and ships have all benefited
over the past two decades from economies of scale, although there are con-
sequences to routes as modal units get bigger. The most profound, as applied to
ships, is that they call at fewer ports. Simply stated, ships make money when they
are sailing, and lose it when in port. If larger ships use the new locks, they will stop
less frequently if they are to be profitable.
This opens an interesting debate as to the form this takes. Some contend that such
ships would hub in the Caribbean, and smaller feeder vessels would complete the
routes to Gulf ports. The benefits of this system centered on reducing sailing
distance across the Gulf, taking advantage of off-shore, low-cost, 24/7 port
operations; and concentrating on the trade lanes carrying high volumes of trade,
such as from South America. Furthermore, smaller vessels could serve a wider
variety of Gulf ports currently limited by channel depth. More recently, direct
service to key ports like Houston appears commercially feasible based on the 6,000
to 8,000 TEU ship class – technically not a true Mega-ship. The tipping point

between hub and spoke and direct service is demand. If a Gulf port is a true load
center – which none is at the moment – direct service is viable. Load centers have
several key characteristics:
 They are the gateways to regions, not states;
 They generate high volumes of trade, which, in the case of containers,
exceeds 4 million TEUs; and,
 They have strong landside connections linking multiple modes, and they can
offer steamship companies a fast turnaround to keep ships sailing.
As such centers emerge in the next two decades in the U.S. Gulf and South
Atlantic, direct service will grow. At this moment, route development following
the new Panama Canal locks is speculative and imprecise. They should maintain
scrutiny on how the marketing of steamship companies changes from 2013
onwards in the build up to the opening of the expanded Panama Canal for business.
Clearly, due to the many uncertainties described previously, it is impossible to
determine with certainty how much additional freight movement in Texas will
result from the expansion of the Panama Canal. However, it is possible to estimate
the amount of freight moving within the State that has arrived at Texas ports from
the Pacific via the Canal, and the amount of freight being exported from Texas that
is likely to pass through the Canal on the way to its final destination.
According to the ACP, approximately 84 million tons of cargo transited the
Panama Canal from the Pacific to the Atlantic, while approximately 123 million
tons transited the Canal from the Atlantic to the Pacific in 2009. Of this, the Gulf
Coast handled approximately 21 percent of the Pacific-Atlantic cargo (17.7 million
tons) and roughly 50 percent of the Atlantic-Pacific cargo (61.1 million tons). This
is in contrast to U.S. ports on the East Coast and on the Great Lakes, which
handled roughly 35 percent of the Pacific-Atlantic freight (28.9 million tons) and
15 percent of the Atlantic-Pacific freight (18.8 million tons).
In 2008, Texas ports handled 61 percent of all foreign imports to U.S. Gulf Coast
ports (261 million tons) and 40 percent of all U.S. Gulf Coast exports (92 million
tons).17 Assuming Texas ports have an equivalent share of freight transiting the
Panama Canal, it is estimated that, in 2009, Texas ports received approximately
10.8 million tons of freight that had passed through the Panama Canal (Pacific to

Atlantic), and exported approximately 24.4 million tons of freight that passed
through the Canal (Atlantic to Pacific).
Given the top commodities transiting the Canal in 2010, the estimates of Texas‟
waterborne freight moving through the Canal appear reasonable, based on Texas‟
strong export base and commodity mix. The top commodities moving through the
Canal from Atlantic to Pacific – particularly grains, petroleum products, and
chemicals – are among Texas‟ top waterborne exports.
The ACP estimated that with expansion, total volumes transiting the Canal would
rise from a total of 279 million tons in 2005 to 508 million tons in 2025, a 3.0-
percent annual growth rate. If this growth is evenly distributed, Texas ports can
expect to receive an additional 6.6 million tons of cargo arriving from the Pacific
via the Canal, and to export an additional 15.0 million to destinations in the
Pacific.

While the expansion of the Panama Canal is targeted toward serving container
traffic – in particular consumer goods originating in Asia and bound for markets on
the East Coast of the U.S. – the Canal also is likely to continue carrying a large
amount of exported bulk freight from Texas ports to destinations in the Pacific.
Though only a handful of ports in Texas serves significant volumes of
containerized traffic or will be able to accommodate the very large ships newly
able to transit the Canal, the impact of the Canal expansion will not be limited to
only those facilities. Rather, the expansion is likely to have significant impacts on

many Texas ports – some of which may develop feeder services connecting them
to larger hubs, their surrounding communities, and the highways and rail lines that
serve them.
Key factors likely to impact Texas as a result of the Panama Canal‟s expansion
include:
 Accelerated growth at Texas ports;
 Higher volumes on intermodal connectors;
 Increased development of distribution and warehouse facilities in port areas;
 More distribution centers focusing on Asian trade;
 New competitive pressures on ports to increase channel depths;
 More extensive communication with other Gulf and Atlantic ports;
 More communication with Caribbean Transshipment hubs;
 Inquiries from Midwest shippers in Texas ports and Texas-based distribution
centers;
 Resistance from environmental advocates and/or regulatory agencies to pro-
posed new dredging projects; and
 Air quality and other environmental impacts.
There are several steps that the Texas transportation stakeholders can take in order
to maximize the benefits accruing to Texas as a result of the Panama Canal‟s
expansion, including the following:
 Deepening channels and berths, where necessary, to accommodate
larger vessels – The Port of Houston is one of several Gulf and East Coast
ports with the greatest potential to handle post-Panamax vessels; the largest
vessels passing through the Canal are likely to call only at the largest ports,
while most Texas ports are expected to receive calls from these new mega-
ships as frequently, the Port of Houston has already received light-loaded
vessels with capacity of more than 8,000 TEUs.21
 Improving intermodal truck and rail connections between the ports and
the major U.S. consumer markets – Better regional highways and port
connector roads (typically, the “last mile” of roadway between the port and
the nearest interstate highway) are needed to handle trucks draying
containers between the port and local and regional markets, and additional
rail capacity and services also will be needed. Capitalization of the Texas
Rail Relocation and Improvement Fund would allow the State‟s railroads to

improve their infrastructure and operations, improving freight mobility and
economic competitiveness for shippers. Since its creation in 2001, no
funding has been appropriated for the Port Access Account Fund, which was
originally set up to enhance port competitiveness and economic
development. Yet, if a funding stream can be identified, the fund could serve
as tool to coordinate and finance the $673 million of future capital projects
that have been identified by Texas port authorities.22 In addition, they
should work closely with its district and metropolitan planning organization
(MPO) partners, private-sector freight stakeholders, and neighboring states,
as appropriate, to identify key bottlenecks on the highway and rail systems
that may be exacerbated by the anticipated growth in container traffic
derived from both imports and exports caused by the Panama Canal
expansion.
 Responding creatively and effectively to environmental and community
concerns regarding the impacts of port activities – Added freight
through-put to the Texas port system will generate many legitimate
environmental and community concerns regarding emissions, noise, and
changes in land use. Even prior the Canal‟s expansion, Texas had seen
periods of rapid cargo growth and facility expansion in recent years and is,
therefore, in a good position to anticipate the types of issues that will be
raised. Given current trends in logistics, Texas could see more distribution
centers shifting to 24-hour operation, which will create the potential for
community impacts. They should work with the Port Authority Advisory
Committee, other stakeholders in the maritime community, MPOs, districts,
and other planning agencies to ensure that potential environmental issues
related to the Panama Canal expansion and other global maritime trends are
identified and accounted for within the transportation planning process at the
statewide, regional, district, and metropolitan levels.
 Integrating freight and land use decision-making at the local and
regional levels – they should encourage MPOs and other local planning
agencies to work closely with ports to ensure that land use and master
planning activities or strategies are coordinated. they should identify those
areas near ports or freight corridors that are most likely to require future
expansion, and inform the public regarding the location of strategic freight
corridors in order to lower the potential for incompatible development in
these areas. They should also work with ports, port authorities, motor carrier

associations, and local planning agencies to develop a better understanding
of how port-related drayage movements affect the performance of the
transportation sys-tem; the overall mobility of people and goods in and
around key port facilities; and how drayage movements are expected to
change as a result of the Panama Canal expansion.
 Developing transloading and marine highway services to feed traffic
from the major, deepwater hubs to smaller ports across the Gulf and
East Coast – Most Panama Canal traffic will not be moving in the largest
post-Panamax vessels for some time into the future. Much of the traffic will
continue to move in smaller vessels that can provide point-to-point service
for medium-sized markets. Small and medium-sized Texas ports have the
opportunity to maintain or capture this traffic, possibly through employing
feeder collection and distribution networks to and from the larger hubs.
Texas is well positioned to take advantage of the emerging network of
marine highways for domestic maritime shipping. An expansion of domestic
short sea services could help to relieve pressure on other modes.
In order to accommodate larger ships that can carry more TEUs, the Panama Canal
Authority (ACP) is adding a third set of locks and deepening the channel through
the canal and Lake Gatun to allow post-panamax ships to be able to transit the
canal. The new Panama Canal will be able to handle a post-panamax ship of up to

11,000 TEUS with a 51 foot draft. These vessels which will then be the largest
vessels able to transit the Panama Canal are being referred to as new panamax
(NPX) vessels or “E Class” vessels.
The expanded Panama Canal is expected to open in 2014, coinciding with the
100th anniversary of the original opening of the canal. It is uncertain what effect
the expanded canal will have on U.S. East Coast and Gulf Coast ports. However
the expansion of the Panama Canal will have some effect on operations, including
relieving congestion at the canal entrance and allowing the canal to remain
competitive in the international shipping market. The goal of the canal expansion is
not to compete with alternative routes, but instead to have enough capacity for the
users of the canal to better compete (Johnson, 2007). This research provides some
insight into some of the possible effects the larger ships transiting the canal will
have on U.S. East Coast and Gulf Coast ports.
The analysis contained within this report is limited to container shipping and looks
at three primary research questions. First, what is the existing intercontinental flow
of container freight across the U.S. “land bridge” from the West Coast to the East
Coast. Second, what are the benefits and limitations of the all water route through
the Panama Canal vs. the intermodal route by truck or rail across the United States.
The expansion of the Panama Canal is expected to have a significant impact on
canal operations and the ships that transit the canal. The Panama Canal is no longer
a option in the international shipping market but rather an important component of
a worldwide shipping network. Expansion in advance of a trend of larger ships is
going to prevent clogging and possible irrelevance of one of the world‟s most
important trade arteries (Gellman, 2006). To illustrate the importance of the
Panama Canal in the overall worldwide shipping network, currently the Panama
Canal handles five percent of the world‟s trade with approximately 14,000 ships
passing though the canal each year (Wilson, 2009).
The largest effects at the canal itself are expected to be an expanded capacity and
an increase in cost to shippers. For containerized traffic, Traffic World (2007), an
international shipping magazine, reports financial impacts that include an increase
in TEU fees by about twelve percent per year over a period of three years. This is
approximately a nine dollar (U.S.) increase per TEU in the toll for 2008 and 2009.
There will be other similar increases in tolls for bulk tonnage, car carriers and other
segments of the shipping market (Traffic World, 2007).The Panama Canal
Authority has said they plan to double tolls by 2025 (Dupin, 2006).This is an

estimated three and a half percent increase in tolls each year from 2005 to 2025
(Leach, 2006).
Prior to the expansion, the average toll for the Panama Canal was $32,000 per
vessel and the canal was working at 93% of capacity. In addition to the regular toll,
the final slot of the day is sold at “auction” to the highest bidder. For example, a
spot that typically would have been $45,000 went for $230,000 in auction at the
end of one day. There is concern over the increase in canal tolls and there is a fear
that the Panama Canal Authority will raise tolls so high to pay for the expansion
project that shippers will look for alternate, cheaper, routes to the East Coast. “The
tolls are really high now, and if they are doubled, it will force carriers not to want
to use the canal and seek alternative routes like the Suez Canal” (Leach, 2006).
Vessels typically won‟t plan to transit the canal unless they know they will have a
slot. However with the expansion of the canal, there will be an increased capacity.
One estimate is daily traffic will increase from 38 to 51 vessels per day. In 2003,
there were approximately 13,000 canal transits, moving 260 million tons of freight
(Bijo, 2004) and by 2025, some expect this number to increase to 15,000 transits
(Dupin, 2006). Kevin Knight from the U.S. Army Corps of Engineers Institute for
Water Resources estimates that freight volume is expected to increase by an
average of 3 percent a year from 2005 which will double the 2005 tonnage by
2025.
Currently, the container ships transiting the canal today carry 4,500 to 5,000 TEUs
each. However, with the expansion of the canal, ships carrying up to 12,000 TEUs
will be able to pass through the corridor. “The World Shipping Council estimates
that in 2006, about ten percent of the world‟s container slots are on ships larger
than 5,000 TEUs by 2011, 50% or more of the capacity of the world global fleet
will be comprised of these larger ships” (Dupin, 2006).
EFFECTS ON PORT AND PORT EXPANSION:-
Much of the literature on the effects of the Panama Canal expansion on ports
indicates that some ports will be easily ready for larger ship visits, while others
will not. Hampton Roads, Virginia and Baltimore, Maryland have a history of
handling vessels capable of navigating the Cape Horn of South America, which
allows them to easily accommodate the New Panamax (NPX) vessels. Many ports
are acquiring land and putting out contracts to increase capacity and operations at
their facilities. These ports are expecting, in the long term, their business will come

back and that expansion will be necessary to increase operations. Some ports are
looking to privatization as the solution, due to the shift from West Coast to East
Coast ports (Dupin, 2009). Virginia and Baltimore will be ready to accept larger
ships that have transited the canal in 2014 because they already have 50 foot
shipping channels while other ports such as New York / New Jersey may not due
to existing limitations. Although New York will continue to be a major port
because of the large population it serves, it may not be able to handle the NPX
ships due to height restrictions on the Bayonne Bridge (Dupin, 2009).
Many ports are not ready, due to similar problems they face with their draft depths.
However some analysts expect many ports will dredge their channels and purchase
large post-panamax cranes to be able to accommodate larger ships (Dupin, 2006).
Although, this is not an immediate answer because dredging is a lengthy process
and can take many years before a project is approved and completed.
CSX and Norfolk Southern are also helping to improve the intermodal route with
their Southern Heartland Corridor and National Gateway projects to allow double
stacked trains to reach the Midwest quickly. There has also been a growth of
distribution centers in the region and it is becoming more expensive to do business
on the West Coast. This may lead to a possible increase in shipping of freight to
the East and Gulf Coast (Dupin, 2009).
Some researchers feel that in addition to new distribution centers on the East and
Gulf Coast, escalating rail costs and new population concentrations will make the
East Coast ports more effective as a port of call in the next ten years (Miller,
2008). Additionally, with increasing fleets of larger vessels and a growing market
in Asia, East Coast ports can expect larger vessels to arrive via the Suez Canal
(Dublish, 2005).
Additional Challenges
In addition to physical limitations of the canal and ports, there are external factors
that may be responsible for future changes in shipping. Recent reports have
indicated there may be a shift in manufacturing from Northeastern China to
Western India which causes New York to be 3,308 miles closer via the Suez Canal,
over the Panama Canal. This westward movement in the production of goods will
favor movement to the East Coast through the Suez, making the East Coast more
appealing (Knight, 2008). Additionally, Los Angeles and Long Beach are

becoming “boutique ports” with imports primarily becoming destined for the
region immediately around the port (Miller, 2008).
Freeport, Bahamas is in the market to become a hub port where large post-
panamax vessels could offload their cargo and transfer it to smaller ships destined
for U.S. ports. If this were to become a popular mode of freight transport, it is
possible that U.S. ports may not need to deepen as many ports or even dredge as
deeply as originally thought (Knight, 2008).
There are many unknowns related to the expansion of the Panama Canal and its
effect on global shipping. Some are concerned that the size of the ships may not be
the most important factor, but instead an increase in traffic brought by
globalization (Knight, 2008). Also, researchers are concerned that if tolls at the
Panama Canal become too high, other routes such as the Suez Canal will become
more popular (Knight, 2008). A third and perhaps the most important concern is
the readiness of the existing East Coast and Gulf ports. Even ten years after the
expansion of the canal, most ports will not have the necessary capacity to
accommodate post-panamax ships. In order to accommodate larger ships,
infrastructure investments will need to be made. Some of these investments include
deeper channels, longer docks, more storage area and the ability to move
containers from ships to truck or rail (Knight, 2008). At the present time, there
generally is a wide spread belief that the ports just cannot be ready in time to
accept an increase in capacity and frequency of ships.
Port Expansion
The issue of larger post-panamax ships calling on ports is not just a scheduling
issue, but also a physical issue. Larger container ships require longer docks, more
cranes, deeper water and make on-dock rail even more attractive especially with
limited storage space. Additionally, as containers are stacked wider and higher, it
requires larger and more cranes to efficiently unload these larger ships (McCray
and Gonzalez, 2007). Not all ports are ready to accept larger ships or an increase in
the frequency of arrival of these types of ships. Additionally, there is a lot of lead
time required to expand to have the necessary capacity to become a port that
handles NPX ships. New cranes cost nine million dollars (U.S.) to eleven million
dollars (U.S.) and acquiring more land can be costly or possibly, not even an
option. Deeper water can take years, including the time for environmental studies,
permits and expensive dredging (McCray & Gonzales, 2008). All this indicates

that if ports are not ready now, they will not be ready in the near future to handle
post-panamax ships.
The impact to the East Coast and Gulf Coast ports is truly the debated question.
Some say “Enlarging the Panama Canal will be one of the most significant
logistical „Game Changers‟ in U.S. shipping history, providing East Coast ports
positioned to handle larger ships an economic windfall” (Abt, 2008). The key in
that statement is “ports positioned to handle larger ships”. The ability of ports to
handle post-panamax ships will likely be one of the limiting factors in how much
of an increase there will be (Abt, 2008). Ports that want to be a part of this possible
opportunity are outlining their plans for upgrades to increase capacity and size of
ships that they are able to handle. “Besides increased dredging, the most frequently
mentioned plans were investments in rail yard expansion and electric freight
handling equipment and larger greener warehouses” (Abt, 2008).
Four ports on the East Coast are expanding in preparation for a need for additional
capacity as a result of the Panama Canal expansion. These ports include
Portsmouth, Virginia; Charleston, South Carolina; Savannah, Georgia; and
Jacksonville, Florida (Carey, 2006). A logistics specialist at the University of
Tennessee, Tom Mentzer, believes Charleston, Savannah, and Jacksonville will be
in a good position to expand because the West Coast ports will be operating near
capacity after 2010. This may result in shippers exploring alternate routes via the
Suez and Panama Canals (Carey, 2006).
“The ports of New York/New Jersey, Savannah, Charleston, Virginia all are going
to benefit, while smaller ports like Philadelphia, Baltimore, Wilmington, Boston
are poised to become niche, ports rather than compete with bigger ports” (Dublish,
2005).
With a possible increase in freight in these locations, both CSX and Norfolk
Southern will likely benefit especially as the interstates become more congested
(Carey, 2006).
A Transportation Research Board (TRB) discussion panel in 2010 focused on this
very topic. Laurie Mahon, an independent advisor for Infrastructure and Project
Finance, said that many of the ports initially felt that they were going to see an
increase in traffic from the expansion project in Panama. However people are
realizing that they are no longer going to see ship making four or five ports of call,
but, instead, one or two ports of call leading to ports competing for business.

Additionally, Mahon suggested that even with a decrease in traffic, there is a
general East Coast shift to shipping due to congestion and increased port charges in
Los Angeles and Long Beach.
Even with a shift of traffic to the East Coast, Mahon explained that each port has
its own issues. According to Mahon, the dredging program is unorganized without
a strategic allocation of resources. This gives ports with deep water an advantage
above others, which includes Norfolk-Newport News, Baltimore, Savannah, and
Charleston. There is an additional issue with rail connectivity and a lack of federal
funding for rail investment. However, Jeffrey Heller from Norfolk Southern at the
TRB discussion panel said Norfolk Southern has an “eastern rail perspective” and
is investing in a number of large corridor projects, because they feel the capacity
will be needed in the future. Norfolk Southern is expecting a growth of 33%
between 2010 and 2014 in intermodal shipping. Heller notes that, prior to 2000
most freight moved across the land bridge either starting or ending on the West
Coast. However, in 2000, Norfolk Southern noticed a shift towards the East Coast.
For various reasons, including the Suez Canal, the East Coast ports have become
more attractive. Heller believes on dock rail is one of the key attractions when
shippers are looking for a port of call and this is one of the included features in
some ports‟ new designs. Heller showed that it is the position of Norfolk Southern
that container volume between East Coast ports and inland destinations will be
increasing and they have been working on a number of projects that decrease the
number of barriers for freight flow and increase the capacity from the East Coast.
Russell Adise from the U.S. Department of Commerce at the TRB discussion panel
said others tend to describe ports as a window or a doorway with the rail lines and
highways being corridors. In order to best use the system, one must look at the
whole system and where freight is going. Adise makes the recommendation that
users pick ports for the following reasons: cost, congestion, fees, transportation
network, access to transportation networks, capacity, frequency of vessel service,
quality of roads, quality of on dock rail service, the distribution network, the
connecting infrastructure channel and berth depth and width. Adise stated that
there is a potential for greater U.S. throughput and a resilience of port
infrastructure as a result of the Panama Canal expansion. Additionally, he adds that
these benefits can be maximized through the use of dredging, connecting
infrastructure and expansion of inland infrastructure.
Several of the ports on the Gulf Coast and East Coast have put out literature on
why they are ready for the expansion of service as a result of the canal expansion.
Charleston in particular has advertisements marketing their abilities as a deep

water port and their infrastructure abilities that make them able to accept larger
ships. Charleston is also promoting information about larger ships regularly calling
on the East Coast.
What Ports are doing to Prepare
Florida
In Jacksonville, a new terminal is being built by TraPac, the operating component
of Mitsui OSK Lines, a Japanese shipping company, that will double the operating
capacity of Jacksonville‟s port. This is one of four ports involved in expansion in
preparation for an expected influx of freight to the East Coast ports (Carey, 2006).
Virginia
The Virginia Port Authority (VPA) was the first member of the Smart Way port
traffic retrofit program sponsored by the Environmental Protection Agency (EPA)
that provides low interest loans to drayage drivers that want to upgrade equipment.
“Many of these steps are aimed directly at preparing for increased freight coming
through the Panama Canal” (Abt, 2008). Additionally, the port of Norfolk has an
advantage over other ports with a naturally deep channel, at 50 feet (Dublish,
2005). The VPA has purchased cranes that can handle ships 26 containers wide
and plans to double its on-dock rail capacity at the Norfolk International Terminal
(Dublish, 2005).
Maryland
According to Kathleen Broadwater of the Maryland Port Administration, the Port
of Baltimore has reached an agreement about placement of dredging materials
from the harbor deepening project. Additionally, they plan to build a new facility
for additional marine terminal service (Abt, 2008).
South Carolina
Charleston appears to have a significant advertising campaign about what makes
their port unique and why they are ready to accept post-panamax ships now.
Charleston maintains a mean low water depth of 47 feet at the entrance channel
and mean low water depth of 45 feet in the main channel. Additionally, Charleston
maintains deep water at their docks so that if a ship can navigate the channel it will

be able to safely dock as well. They are putting in place a sediment suspension
system that will maintain the depths of their berths at a much lower cost.
“‟Charleston has a significant advantage over many ports because the channel is
such that ships can meet easily without a problems,‟ Bennett said” (Bull, 2004).
Charleston‟s channel is 500 to 1500 feet wide. The deep water and wide channel
allows ships to safely transit the channel (Bull, 2004).
New York/New Jersey
NY/NJ has plans for a 1.6 billion dollar investment to improve the infrastructure,
including deepening their channel to 50 feet by 2014 (Dublish, 2005).
Additionally, they are increasing their rail capacity and putting in to place more
intermodal links. However, the port of New York & New Jersey has limitations on
ship heights due to the Bayonne Bridge crossing the shipping channel.
Georgia
Savannah has the rare advantage that it has major highways next to the port and
plentiful space for warehousing and distribution centers, unlike many of the other
ports (Dublish, 2005). Savannah also has on dock rail with both of the major rail
shippers in the South East, CSX and Norfolk Southern. There is plenty of room for
expansion in Savannah‟s Garden City terminal and they plan to more than double
their annual container load in the future.
The Caribbean
David Bindler, in his article “Are Mega Ships Coming to the Caribbean?” says that
the development of the Panama Canal will have a major impact to the Caribbean
ports. Some Caribbean ports, such as Kingston and Freeport, have pursued larger
ships, but their ports are already at capacity. The Caribbean ports are being used in
a hub and spoke system where large ships transfer their containers to smaller ships
with less draft in the Caribbean. However, if they wish to remain competitive,
Bindler recommends they are going to need to become more cost effective and
have structural and cultural changes (Bindler, 2006). In order to become more cost
effective, Bindler‟s recommendations include increasing crane productivity,
ensuring Caribbean equipment is in service greater than 95% of the time, reducing
truck turnaround times to less than an hour, extending delivery times, upgrading
and streamlining their technology, continue training and implement strict safety
and security measures.

The design and construction of the Panama Canal‟s new locks is the most complex
project under the Expansion Program. At a cost of $3.2 billion -60% of the
program‟s total budgetthecontract was awarded to consortium GrupoUnidospor el
Canal on July 15, 2009. The consortium, formed by SacyrVallehermoso S.A. from
Spain; ImpregiloSpA from Italy; Jan de Nuln.v from Belgium and Constructora
Urbana, S.A. from Panama, initiated the works on August 25 of the same year.
The project involves the design and construction of two locks complexes, one on
the Pacific and the other on the Atlantic side. Each one will have three chambers,
nine water-saving basins, a lateral filling and emptying system and eight rolling
gates. The contractor is currently working on the structural concrete pouring of the
walls and conduits of the locks, while embedding metal parts that will later fit
control electromechanical equipment.
The massive electromechanical parts that will control water flow as part of the
locks operations are being built overseas. For instance, the first two shipments of
valves arrived in Panamanian waters in December 2012 and January 2013,
respectively, from the shipyards of Hyundai Samho Heavy Industries in South
Korea. On the other hand, the 16 rolling gates are being fabricated in Italy by
Cimolai, SpA. Shipping of the first four is expected by August of this year.
An important rationale behind the expansion of the Panama Canal relates to the
improvement of economies of scale in maritime shipping. A growing share of the
world containerized fleet is unable to use the current Panama Canal, imposing new
configurations in maritime services. By 2014, post-Panamax vessels are expected
to account for 48% of the global container fleet capacity. Still, maritime shipping
companies also expanded substantially ship designs fitting the Panamax
specifications. This underlines the importance of the standard, not only because of
its capability to use the Panama Canal, but also since many ports around the world
have a draft and crane equipment designed with such specifications.
Switching away from standards is always a costly and risky endeavor. The canal
expansion has the benefit of putting the capacity on par with the level of
economies of scale applied in long distance maritime shipping while remaining the
de facto ship size standard. Maritime shipping is also highly sensitive to bunker
fuel costs as they represent between 45% and 50% of operating costs with
limited opportunities to mitigate outside slow steaming. Fordecades, the cruising
speed of containerships has been relatively constant, enabling to maintain a level of

schedule integrity along pendulum routes. Rising bunker fuel prices and excess
shipping capacity caused by the financial crisis of 2008–2010 induced several
maritime shipping companies to lower the operational speed of their ships. While
the standard sailing speed of a containership is in the range of 20 to 25 knots,
„normal‟ slow steaming involves speeds between 18 and 20 knots, with super slow
steaming reaching speeds as low as 14 knots.
Recently, the Maryland Port Authority (MPA) extended the deal with the Panama
Canal to generate new business opportunities with Asia. The MPA renewed the
Memorandum of Understanding (MOU) for the next five years with the Panama
Canal Authority. With the Panama Canal expansion project scheduled to be
completed in 2015, the Port of Baltimore will be in the forefront to receive the bulk
of increased activity due to its prominent location in the Northeast and proximity to
the Midwest. As a result, accommodations are currently underway to handle the
increased traffic and larger vessels.
In 2010, the Seagirt Marine terminal agreed on a public-private partnership with
Ports America Chesapeake to complete capital improvements to Seagirt‟s berth
and facilities. A new 50-foot berth, completed in August 2012, is able to host the
post-Panamax vessels that can carry more than 12,000 TEUs. In addition, the
Seagirt Marine terminal has added long-reaching cranes to load and unload the
super-sized container ships. Such upgrades cost approximately $460 million in
equipment and additional enhancements.10 Currently, Baltimore and Norfolk will
be the only two ports on the East Coast that will be able to accommodate the larger
vessels.
According to the U.S. Department of Transportation (USDOT), by 2020 there will
be a 50 percent increase in total cargo traveling through U.S. ports, and
international container traffic will more than double. For many years, the ports on
the West Coast have served as the primary docks in the U.S. for cargo transported
from Asia. Once the cargo arrives at West Coast ports, it is shipped across the
nation to the East Coast via the U.S. “land bridge” using rail or road and trucks as
modes of transport. As quick transport of cargo across the country is important,
there is a strong need for an alternative strategy, such as a greater use of the East
Coast ports. Another factor contributing to this alternative strategy is the limited
land area around the 29 major West Coast ports. The West Coast is very congested
and has limited land to build the necessary warehouses and distribution centers.
However, the East Coast and Gulf Coast ports have nearby areas where
construction and expansion can occur.

In 2002, roughly 7,000 members of the International Longshoremen and
Warehouse Union went on strike, impeding the ability of many importers and
retailers to ship through several West Coast ports and resulting in service
disruptions. Between the years 2004 and 2008, additional labor disputes occurred,
causing more closures. Many “importers, retailers, warehouse distributors,
shipping companies and state port authorities” joined together to find an alternative
trade route for their vessels. The East and Gulf Coast ports were perfect for a less
expensive strategy for cargo transportation.”
Mississippi River and accounts for 60 percent of the nation‟s GDP. This poses a
major limitation for West Coast ports as they have higher costs associated with
moving goods inland when the final destination moves eastward.
The relationship between time and cost via an all-water route and intermodal
transportation route serves as the focal point for the comparative advantage
between the East and Gulf Coast and the West Coast ports. On a per-TEU basis, an
all-water route is the least expensive transportation option.
Intermodal transportation (water/rail) is the best option for container traffic based
on both time and cost. Following the expansion of the Panama Canal, the “East and
Gulf Coast ports could attract up to 25% of ship traffic that was previously
destined for the West Coast.” Considering the comparative advantages that the
East Coast ports have over the West Coast ports, the Class-1 railroad company
CSX saw this as a beneficial opportunity to market its double-stack rail freight
train cars to better serve the Eastern Seaboard.
In anticipation of the expanded Panama Canal expansion, companies are likely to
soon choose an alternative low-cost route to distribute their freight. Experts in the
industry are predicting a shift of containerized cargo from the West Coast ports to
the East Coast ports by 20 to 25 percent. With its proximity to the majority of the
population, the Port of Baltimore will be in a prime location to capture a significant
percent of the market share of maritime business. In addition, inland ports are
becoming favorable for ships because of fuel efficiencies and economies of scale.
A number of CSX operating facilities are located in Maryland, including Curtis
Bay and Jessup. CSX maintains roughly 830 public and private crossings
throughout the state and handled 1,156,000 carloads of freight in 2011.22 The CSX
operating facilities contribute significantly to the state‟s economy. In 2011, a total

Impact on trade on expansion of panama canal a dissertation

Impact on trade on expansion of panama canal a dissertation

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a Impact on trade on expansion of panama canal a dissertation

Semelhante a Impact on trade on expansion of panama canal a dissertation (20)

Mais de Heisenberg26

Mais de Heisenberg26 (13)

Último

Último (20)

Impact on trade on expansion of panama canal a dissertation