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U.S. Ports Expands to be with Panama’s $5 Billion Canal Upgrade

Maritime Activity Reports, Inc.

April 20, 2015

 A report in the USA Today says that the U.S. ports are busy deepening harbors and building bigger terminals to draw the bigger ships. Across the USA, public ports and their private sector partners will spend more than $46 billion in port-related improvements through 2016, according to the American Association of Port Authorities. 

 
States are seeking to spend billions of dollars to build bigger ports to accommodate the massive ships that will soon be traveling through the canal. 
 
The Panama Canal expansion has sparked the competitive imagination of East Coast and Gulf Coast (EC/GC) port authorities, who hope to capture some of the 70% of U.S. imports currently controlled by West Coast (WC) ports.
 
Ports typically make their revenues through leases with shipping lines, wharfage fees, and tariffs. So the more containers a port handles, the more money it can make.
 
"It's the era of big ships," said Richard Larrabee, director of the Port Authority of New York and New Jersey, which is overseeing a $6 billion upgrade to its harbor, container terminals, rail lines and bridges to draw the large ships. The Panama Canal "opened up the notion that we could see ships twice the size we normally do once the canal was opened. That was the real impetus for us."
 
 State governments and their port authorities all along the Gulf and East coasts are seeking to spend billions of dollars building bigger ports as quickly as possible, in a rush to accommodate the larger ships that will start traveling through the canal.
 
Many of the U.S. projects are driven by a variety of factors, the canal expansion being just one of them, said Kurt Nagle, president of the port authorities association. But the Panama Canal Authority's ambitious goal of keeping up with the trend of larger cargo ships has been a model for many U.S. ports, Larrabee said.
 
Experts at the U.S. Army Corps of Engineers (USACE) call the Panama Canal expansion a likely “game changer” for U.S. trade, potentially redistributing the market share of each coast’s ports, as well as opening up new import and export markets for agricultural and other products along inland waterways.
 
Some have estimated that container volumes at EC/GC ports could more than double from 2012 to 2029. But with this growth come questions about what major initiatives to expand cargo capacity could mean for public health in these port cities.
 
"The Panama Canal is a great poster child for what the United States needs to do if we want to stay competitive in international trade," Nagle said.
 
If the U.S. doesn’t act fast, port officials agree, it could find itself at a competitive disadvantage compared to other countries. If American ports expand, shipping processes could become more efficient, making American exports less expensive and more attractive. Additionally, failure to expand could facilitate a robust business of feeder ports in Canada, Mexico and the Caribbean.
 

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