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Panama Canal Expansion

The Panama Canal expansion is expected to have many implications.

The expected completion of the Panama Canal expansion in 2014 has many ports scrambling to be ready for post panamax ships that are expected to use the expanded canal beginning in 2014.  Governing Magazine has an excellent article on the expansion issues facing those ports that don't have naturally deep water channels.  See Panama Canal Expansion Has U.S. Ports Rushing

 

Based on what I know of the industry I don't think speed of transit is the major issue these days.  It was back in 2005-2007, but today it is all about cost.  The Great Recession put significant pressures on the shipping industry.  At one point shipping lines were losing money on every container they carried.  It is only because most of the shipping lines are linked with national economies that we didn't see some bankrupt companies or mergers between shipping lines.  The cost of fuel has gone up significantly and so there is a strategy of "slow steaming" and "quick offloading" of cargo.  

 

The other significant aspect of the expansion is the access to ports located in Right to Work States  The lower labor costs there may prove attractive to shippers and beneficial cargo owners.  

 

The security implications of this new trade route that will have significantly more cargo carrying capacity has yet to be seen.  Certainly the trade route in close proximity to drug producing sectors of the world may create new hassles for the Customs and Border Protection agency.  Brazil has become an economic powerhouse and the new capabilities of the canal will benefit their export and import needs.  

 

Only time will tell the full impact of the canal's expansion.