Decision to expand Panama Canal locks should benefit East and Gulf Coast ports

The decision to expand the 92-year-old Panama Canal should provide a major boost to East Coast and Gulf ports, even those that cannot handle post-Panamax vessels.

By building locks capable of handling much larger ships, and widening and straightening channels, the Panama Canal Authority will dramatically increase the canal’s capacity and allow the transit of vessels up to 1,200 feet long, 160 feet wide and with a draft of 50 feet. The canal now can only handle vessels no larger than 965 feet long, 106 feet wide and with a draft of 39.5 feet.

“When the capacity of the canal is increased, and this will be a very substantial increase, it’s not only going to help the big ports, it’s going to help all ports,” said Thomas Valleau, executive director of the North Atlantic Ports Association based in Portland, Maine.

Panamanians approved the $5.25 billion expansion on Oct. 22 with 77 percent of voters in favor. The National Assembly of Panama and the country’s executive branch are reviewing the proposal, with final approval expected in the first quarter of 2008, according to Teresa Arosemena, spokesperson for the Panama Canal Authority (ACP).

The canal expansion is projected to almost double the tonnage that passes through the canal from 279 million net tons in fiscal year 2005 to 508 million net tons by 2025, according to Arosemena. (A net ton is equivalent to 100 cubic feet of capacity.)

Construction on the expanded canal is scheduled to start in 2008, and the new locks could be open as early as 2014. One lock complex will be built to the east of the current Gatun Locks on the canal’s Atlantic side, according to the canal authority’s proposal. On the Pacific side, a new channel will be dredged from the Culebra Cut to the Gaillard Cut, with a new lock complex built closer to the Gaillard Cut. This new channel will bypass both the Pedro Miguel and the Miraflores locks.

Each of the new lock complexes will have three consecutive chambers; next to each chamber will be three water basins, which will help fill and empty the locks.

The project will not require building additional reservoirs.

The new channels and locks will be built in territory already controlled by the canal authority. Construction will not displace communities or harm national parks, tourist areas, or animal species, according to the canal authority.

Extensive deepening and widening of existing navigational channels are planned to allow vessels with a 50-foot draft to transit the canal. In 2002, a project began to dredge the Gatun Lake Channel. For the expansion, the lake’s channels will be widened to at least 920 feet in straight sections and 1,200 feet in turns to allow post-Panamax vessels to travel in opposite directions.

The water level of Gatun Lake will be raised about a foot and a half. Deepening Gatun Lake and other navigation channels and raising the lake level means there will be an additional 385 million gallons of water available daily. It means the increased ship traffic can use the locks without impacting the water supply for human use in the region, according to the canal authority.

The new locks will be built with rolling gates that slide into a recess perpendicular to the lock chamber. The canal’s current lock gates swing into the lock wall. Another change is that tugboats are planned to help position ships in the new locks, instead of the small locomotives that are used now to tow the ships.

Financing for the $5.25 billion project will come entirely from toll increases, which will start in 2007, with no funding from the government of Panama, according to the canal authority, which doesn’t expect traffic delays during construction.

With the Panama Canal operating at 85 percent capacity, any significant growth in the all-water route from Asia to the United States would be restricted by that bottleneck. In 2005, the average time to transit the canal, including waiting for a slot, was 30 hours.

Alternative cargo routes include the Suez Canal or off-loading goods at West Coast ports, although there are concerns about the ability of West Coast ports to handle growth in container traffic.

“There are two alternatives, and both are problematic,” said Valleau.

Right now, the canal has a 38-percent market share of goods shipped from northeast Asia to the East Coast, according to the canal authority. If Panama had decided not to expand, shippers would have diverted cargo to other routes, decreasing traffic to the East Coast. The expansion “will help support the all-water market and let it grow, ” said Richard Wainio, port director and CEO of the Tampa Port Authority. A larger Panama Canal means “an increasing share of the Asian-U.S. East Coast market will move on the all-water route through the Panama Canal, instead of going intermodally or going through the Suez route,â€� Wainio said.

The expansion comes at a time when worldwide container cargo traffic is surging. If the U.S. economy remains strong, container cargo is forecasted to increase by 85 percent by 2015, according to an August report by Ocean Shipping Consultants Ltd., of Surrey, England.

The tremendous growth in Gulf and East Coast cargo traffic was a major factor in the ACP’s decision to expand, said Rodolfo Sabonge, the canal’s corporate planning and marketing director. “In a sense, the expansion of the Panama Canal is aimed at being able to continue that growth,” he said.

It’s not just the increased capacity that will help East Coast ports. The new locks mean that the Panama Canal will be able to handle Suezmax containerships of up to 12,000 TEUs (20-foot equivalent units). Right now, the largest Panamax container vessels can carry about 4,500 TEUs.

Even with the expansion, the canal will not be able to accommodate the biggest containerships afloat today. The biggest containership currently in service, Emma Maersk, is 1,304 feet long and has a beam of 184 feet. That means it is 100 feet longer and 24 feet wider than the new locks.

After analyzing the origin and destination ports and the type of vessels plying canal trade routes, the ACP decided not to design the new locks for the largest ships now being built. “We see going through the canal in the future more of the 6,500-TEU and up to the 8,000-TEU vessel that is the work horse for our trade routes,” said Sabonge. “We are very comfortable with the size of the locks for the next 40 years.”

As happened with the current canal, ship owners and builders will adjust vessel dimensions to the new locks. “We are developing now, after the construction of the locks, a new Panamax,” said Sabonge.

As East Coast and Gulf ports plan for the expansion, decisions have to be made regarding the huge infrastructure investments needed to handle post-Panamax vessels. New York/New Jersey, Norfolk, Houston and Miami are just some of the ports that can accommodate or are working to accommodate post-Panamax vessels. Improvements include larger distribution centers, new gantry cranes, upgraded rail connections and channel dredging.

It would make sense for the United States to analyze facilities and determine how many deepwater ports are needed, according to Wainio. “We don’t do national planning it’s every man for himself,” he said.

Ports will be seeking federal funds to help build new facilities and dredge deeper channels for the post-Panamax ships. “The money simply isn’t there for every port from Maine to Miami to be dredged to 50 or 55 feet,” Wainio said.

But Valleau, of the North Atlantic Ports Association, said port officials need to consider carefully what they really need before coming up with big expansion proposals. “I’m conservative about this,” he said. “I wouldn’t recommend that all ports hasten out and go dredging to 60 feet and investing a billion dollars to buy the cranes and create the inland systems that are necessary … It’s a very complicated business calculation.”

And there will still be a need for ports to handle the smaller vessels, “because not all of these ships are oversized, post-Panamax ships   many of them aren’t,” Valleau said. “We need the mix.”

Categories: Maritime News