Western U.S. ports prepare to handle increased shipping from expanded Panama Canal

The expansion of the Panama Canal might make some eastern U.S. ports more attractive to large-vessel operators. But West Coast ports aren’t ready to roll over and play dead just yet.

June 16, 2016 |
Western U.S. ports are preparing to handle increased shipping from expanded Panama Canal

Rendering of the planned $1.5 billion replacement of the 50-year-old Gerald Desmond Bridge, at the Port of Long Beach, Calif. The new bridge will allow larger, taller vessels to pass under it. Click here to enlarge.

It’s still faster and more cost effective to ship to most parts of the U.S. from West Coast ports than through the Panama Canal, according to a report from CBRE. The Journal of Commerce recently noted that West Coast ports have bounced back from last year’s prolonged longshoremen’s strike and have regained their customary share of containerized imports.

An expanded Panama Canal will cap cargo capacity per vessel at 13,000-14,000 TEU (a measure of container capacity), whereas western ports can already accept vessels with capacities up to 18,000 TEU, according to Dr. Noel Hacegaba, PPM, CPE, Managing Director–Commercial Operations for the Port of Long Beach, Calif.

THE PANAMAX EFFECT

Cities lining the East Coast and Gulf Coast are spending big bucks to accommodate the larger vessels that will cross a wider and deeper Panama Canal.

Last year, Long Beach handled 7.2 million containers, the third best year in its history. Hacegaba says that the Panama Canal expansion might even increase the flow of goods from east to west, especially from eastern South America. “The expansion gives suppliers alternatives,” he says.

Long Beach projects a 4% annual increase in container volume over the next several years. The port is in the midst of a $4 billion infrastructure upgrade over the next decade. Improvements include a fully automated, $1.3 billion Middle Harbor terminal capable of handling 3.3 million TEU. The port is also replacing the 50-year-old Gerald Desmond Bridge—over which 15% of the nation’s goods travel—at a cost of $1.5 billion.

Hacegaba says about 30% of containers leave Long Beach by rail. The port wants to increase rail traffic to 50% to take advantage of rail’s efficiency and environmental cleanliness compared to other transport modes. Long Beach is exploring a short-haul rail operation and an inland container yard.

Hacegaba says 18 million sf of warehouse space lies within 100 miles of the Port of Long Beach, and more is being built. “The port is an economic engine for the Inland Empire,” he says.

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