Canal expansion to shake up US trade patterns

[Judi Lynn]

Canal expansion to shake up US trade patterns

James Baker | Tuesday, 14 July 2015

When the enlarged Panama Canal opens next year, shippers transporting goods to the US Midwest will face new choices over speed and cost. As much as 10% of Asia-US container traffic could be re-routed to US east coast ports by 2020, following the opening of the expanded Panama Canal, according to new research by Boston Consulting Group and CH Robinson.

While this may be small in percentage terms, in terms of absolute volumes it marks a huge amount of capacity on high-volume trades between Asia and the US, and it remains to be seen whether east coast ports will have the wherewithal to cope with the increased throughput.

While shipping direct from Asia to the US west coast will remain the fastest option for shippers for some inland destinations and for some types of cargoes, a more cost effective solution will be to utilise the larger ships that will be transiting the expanded Panama Canal and calling at eastern seaboard ports.

According to Boston Consulting, two-thirds of container flow from Asia is landed at west coast ports, with much of that cargo then being forwarded as far east as the Ohio River Valley, or approximately three quarters of the way across the continent. “But once the big, efficient post-panamax ships begin passing through the wider, deeper canal, the shipping dynamics will change,” the report says.

More:
http://www.lloydsloadinglist.com/freight-directory/news/Canal-expansion-to-shake-up-US-trade-patterns/63465.htm#.VaU4fmdREq1

[djean111]

1. Hopefully, this is more infrastructure need that will be addressed. n/t