Mhlnews 4677 Panama Canal Feb 1 1
Mhlnews 4677 Panama Canal Feb 1 1
Mhlnews 4677 Panama Canal Feb 1 1
Mhlnews 4677 Panama Canal Feb 1 1
Mhlnews 4677 Panama Canal Feb 1 1

How Will US Supply Chain Change with Panama Canal Expansion?

Aug. 10, 2016
As much as 10% of container traffic between East Asia and the U.S. could shift from West Coast ports to East Coast ports by the year 2020, according to the Boston Consulting Group.

With giant ships able to pass through the expanded Panama Canal, the U.S. is making considerable investments to ensure that East Coast and Gulf Coast ports can accommodate the increase in traffic.

“The opening of the expanded canal will have a ripple effect on the economy – impacting not only U.S. ports and shipping, but the railroad and trucking industries as well, along with virtually every company involved in trade with Asia, or manufacturing or sourcing from Asia,” explains Harold Sirkin, managing director of Boston Consulting Group, in an article in Forbes.

He points to a study done by his firm that found as much as 10% of container traffic between East Asia and the U.S. could shift from West Coast ports to East Coast ports by the year 2020. He explains that that the West Coast ports, which are almost at near capacity, will experience less growth that they might otherwise.

Across the country, total public and private investment from 2016 through 2020 on port infrastructure and related projects are expected to approach $155 billion, about 30 times greater than the cost of the canal expansion.

Here are some of the projects underway:

  • The Port Authority of New York and New Jersey will spend $1.3 billion to raise the height of the Bayonne Bridge, which connects Staten Island, N.Y. and Bayonne, N.J. This will allow the bigger ships to pass under the bridge so they can get to the docks for loading and unloading. Another $1.6 billion will be spent deepening the harbor and shipping channel.
  • The South Carolina Ports Authority will spend a reported $1 billion through the end of the decade on dredging and other capital improvements at the Port of Charleston. Another $4.5 billion will be spent on a new container terminal in Jasper County, S.C., adjacent to the Port of Savannah.
  • Upstate South Carolina, where the state’s “inland port” is located , which expects to become a major rail hub distribution center as a result of the Panama expansion is planning a  second inland port.

Read more on the changing supply chain. 

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