The New Panama Canal | Impact on Global Shipping and Relocation
Now under construction, the 21st century version of the Panama Canal will bear little resemblance to the one that was completed in 1914. Considered a modern marvel in its day, the original Canal will soon be an anachronism. In its place will be a behemoth of a passageway, the current expansion of which is estimated to cost Panama US$5.25 billion. When complete, the Canal’s two new levels of triple locks will double its existing capacity to accommodate mammoth container ships nearly 100 feet tall and as long as aircraft carriers.
How will the new Panama Canal affect assignees and the companies relocating them?
It’s very likely we’ll see a decrease in shipping costs globally for things like household goods. Modifications to existing shipping routes will also likely be a result of increased traffic at the Panama Canal and improvements at other global ports to compete for business. This could lead to quicker or slower delivery times depending on how the situation normalizes.
Who is responsible for designing and building the Panama Canal?
The work is being carried out by a loose alliance of international players. “The 16 lock gates … were designed by the Dutch and built by Italians,” reports The Washington Post. “Beginning next month, they will be lifted onto a barge by Belgians and shipped by South Koreans to Panama in a project managed by the French.”
What does this all mean for the ports of the world?
In addition to Panama itself, which looks to recoup much of the funds outlaid for the work via the collection of tolls from users, ports around the globe are scrambling to be ready to accommodate the gigantic new container vessels that are the future of global shipping. In the U.S., port cities are spending between US$6 and US$8 billion to upgrade their ability to host the new class of vessels, according to the Army Corps of Engineers. For example:
- The Port Authority of New York and New Jersey, whose port has sufficient depth for the “Super Panamax” megaships, will pay US$1 billion to elevate the Bayonne Bridge so the huge ships may pass beneath it.
- In Miami, the US$2 billion DeepDredge harbor project will enable use of the megaships, but two new US$600+ million tunnels are needed to truck goods in and out of the port.
- In Norfolk and Baltimore, the harbors are deep enough for the new ships, but ancillary land-based transportation routes need drastic upgrades to be up to the task of transporting goods into and out of the area.
Around the world, says the Post, “Ports in the Bahamas, Jamaica, Chile, Peru, Brazil, Colombia, and the Dominican Republic are rushing to upgrade in hopes the ships will enter their harbors, too.”
Learn more at our Cartus eLearning sessions
The changes to the Canal as well as a variety of other issues related to international/worldwide household goods shipping will be discussed in an eLearning to be held at the end of February in each Cartus region. I will join Gemma Perry in EMEA on February 26; Patrick Keery in the U.S. on February 27; and Louise Grace in Asia Pacific on February 28. In each presentation, we’ll cover key topics as well as best practices in the HHG industry. I hope you can join us.
( If you have not received an invitation to this event, and would like to attend, please send your request to firstname.lastname@example.org.)
Contact this contributor at Jim.Edwards@cartus.com