East Coast ports look forward with great anticipation to the completion of the Panama Canal expansion project in 2015, while West Coast ports are apprehensive about a possible loss of cargo. However, Panama’s growth as a transshipment hub could actually be good for ports on both coasts.
Alberto Aleman Zubieta, who retired on Sept. 3 after serving for 17 years as head of the Panama Canal Authority, said the enlarged canal will open up trade opportunities between the growing markets in Latin America and ports on both the West and East coasts of the U.S.
Industry experts assume East Coast ports will increase their share of the U.S.-Asia trade when post-Panamax vessels are able to transit the expanded canal. Aleman said container ships with a capacity of up to 13,200 20-foot container units will be able to transit the canal when the expansion project is completed. The largest vessels that can transit the canal in its current configuration have a capacity of about 5,000 TEUs.
Today, West Coast ports control roughly 70 percent of U.S. imports from Asia, with the East and Gulf Coast ports having a market share of about 30 percent. Estimates of cargo diversion to the East Coast after 2015 range from a few percentage points to more than a 20 percent shift of market share.
Aleman emphasized that one of the greatest benefits of the project, which will be enhanced by expansion of port facilities on both coasts of Panama, is that the country’s role as a transshipment center will increase. He said the distance from Panama’s Pacific coast to its Caribbean coast is only about 50 miles, and Panama already has more cranes than most ports in Latin America.
The enlarged canal will allow large vessels from West Coast ports to proceed directly to growing markets such as Brazil on South America’s Atlantic Coast. Also, transshipment of freight from large vessels to smaller vessels calling at Latin American ports that are not able to accommodate mega-ships will also increase.
Aleman envisions Panama providing services similar to Singapore, which is now the largest port in the world, in part because of its role as a transshipment hub for Southeast Asia.
Singapore is also one of the most productive ports in the world, and Panama’s ports will have to continue to increase their productivity if Panama is to become a transshipment port for the Americas, Aleman said.