Panama Canal Expansion

The $5.25 billion expansion of the Panama Canal will either dramatically boost East and Gulf Coast container trade or disappoint their expectations of gaining more cargo. But the opening of much larger locks in early 2016 is already boosting prospects for more exports to Asia from U.S. Gulf ports of LNG, coal and grain cargos.

What is certain is that the doubling of capacity on the connector of the Atlantic and Pacific oceans will change the way the world¹s shipping lines ply their global routes when the project is completed. The doubling of the canal’s capacity will allow shippers to bring their Asian goods to the Eastern and Gulf coasts for less money. That’s largely because the new locks will be able to handle larger vessels that can carry nearly three times as many containers. The project is also expected to bolster Panama’s strategic positions as a transshipment hub and business center for much of Central and South America.

For general developments at the Panama Canal, see also JOC’s Panama Canal News page.

News & Analysis

24 Jun 2016
The 2M Alliance plans to shift one of their Asia-to-U.S. East Coast services to the newly expanded Panama Canal.
Port of Los Angeles, Gene Seroka at PPNA 2015.
19 Jan 2016
Port of Los Angeles' Gene Seroka on current status of preparations for mega ships as the opening of an expanded Panama Canal approaches in 2016. Seroka details projects such as the Alameda Corridor, planned to handle trains 50 years into the future, the repurposing of land into "peel-off" yards, and revolutionary technology platforms from the U.S. DOT to Uber-like operations for less-than-truckload shipping.
18 Jan 2016
The opening of larger Panama Canal locks, already postponed several times by construction delays, has been pushed back again and now is expected early in the second quarter, a canal official said.
14 Jan 2016
The world’s fifth-largest container line, Hapag-Lloyd, expects no major tonnage changes on all-water container services through the Panama Canal before the end of this year.
12 Jan 2016
Even though the official opening of Panama Canal’s third set of locks is only about four months away, the true impact of the $5.25 billion project on U.S. East and West Coast ports is yet to be determined because of the many factors that affect international trade flows, the vice president of marketing at Manzanillo International Terminals said Monday.
11 Jan 2016
What changes can shippers expect from the larger Panama Canal locks? There’s no consensus. Though ocean carriers already are factoring the canal expansion into their routing plans, most analysts expect the changes to play out gradually over several years. Wild cards include trade demand, intermodal rail rates, canal toll levels, fuel prices, carrier mergers and acquisitions, and shifts in ocean carrier alliances.

Commentary

The U.S. Army Corps of Engineers' channel assessment methodology based on national benefit/cost ratio is speculative and, in some areas, flawed, especially on the benefit side.

More Commentary

Video

Port Miami Director Juan Kuryla and JOC Senior Content Editor Alessandra Barrett talk on the sidelines of the 16th TPM Conference about Port Miami’s efforts to prepare for the expanded Panama Canal.
At the 16th TPM Conference JOC Senior Content Editor Alessandra Barrett and Norfolk Southern Railway Director of International Intermodal Randy Bayles discuss how the expansion of the Panama Canal has impacted how NS serves ports on the U.S. East Coast and the challenges presented to intermodal rail providers by container surges from mega-ships.
JOC Senior Content Editor Alessandra Barrett and Florida East Coast Railway President and CEO Jim Hertwig sat down at the 16th TPM Conference to chat about the impact of the expanded Panama Canal on Florida ports and transport firms, the FECR’s new e-commerce platform, and the future of shipping refrigerated products in South Florida.