Ports along the U.S. East and Gulf Coasts are racing to expand so that they can take on an anticipated growth in shipping once an expanded Panama Canal opens.
(Click the audio player to hear more on this story from CNN Radio's Steve Kastenbaum)
New locks are expected to be completed at the Panama Canal in 2014. They’ll enable much larger ships to pass through the canal, providing these ships to take direct routes between Asia and the U.S. East Coast.
“It will dramatically change the dynamics of shipping to the East Coast, or at least that’s the expectation of some in the industry,” said Manju Chandrasekhar, a vice president with the engineering firm Halcrow. He’s been working on port expansions and other infrastructure projects for the past 16 years.
“These ships are bigger. It also means that they sit deeper in the water. The industry term is the draft,” Chandrasekhar said. “They draw a deeper draft, which means that the navigation channels, or the access waterways, to these ports will need to be deepened in certain ports.”
Billions of dollars worth of expansion projects are taking place at U.S. ports from New York to Miami. The Port Authority of New York and New Jersey is raising the roadbed of the Bayonne Bridge, which links Staten Island, New York, and Bayonne, New Jersey, by 64 feet so the larger ships can fit beneath the span.
The Port of Savannah, Georgia, also is undergoing improvements, with officials there expecting a big increase in business when the Panama Canal expansion is finished.
“We are the fourth-busiest container port in the United States,” said Curtis Foltz, executive director of the Georgia Ports Authority. “We’ve spent about $1.1 billion modernizing our facilities - that’s the inside of our terminals - and the state is going to spend close to another $200 million in near-port road and rail access.”
Like other facilities along the East Coast, the Savannah port also is asking the Army Corps of Engineers to deepen and widen the navigational channel leading to the port. At Savannah, this is at a projected cost of $600 million. But the port is more than 35 miles upstream, and environmental groups have voiced concerns about the impact on the Savannah River.
“It’s a huge investment for commerce,” Foltz said. “If it were just for the state of Georgia, one might question the investment. But in that it’s about serving commerce more efficiently for the entire Southeast, it’s something that our nation needs and consumers and producers of goods deserve.”
Meanwhile, 130 miles south of Savannah, the Port of Jacksonville, Florida is gearing up in the same way.
“We’re preparing for the future,” said Paul Anderson, CEO of the Jacksonville Port Authority. “We’ve built a new terminal in a public-private partnership that will double our capacity to almost 2 million containers of capability here at JaxPort.
"We’ve just received new cranes. And we’re also looking, as are many ports along the East Coast, to continually deepen our channel to accommodate larger ships.”
All of those ports are asking for tax dollars for some aspects of their expansion projects. But the federal government looks at the requests on an individual basis. No agency is tasked with looking at cargo facilities in the United States as a whole. No government entity is looking at the big picture and determining where it makes the most sense to spend the limited tax dollars that are available.
“Clearly, there should be ... a national strategy,” Anderson said.
He would like to see a national freight policy that sets forth an intermodal plan for moving cargo efficiently in and out of the United States well into the future.
“All ports will gain from it, and I don’t think there will be any winners and losers,” he said.
Cargo shipments in the United States are expected to double over the next few decades because of the increase in global population.
“Yes, we are competing for the same business, but if you double that business in 20 years, there is plenty of cargo prospectively that will allow all ports to capture enough cargo to be winners,” Anderson said.
While Anderson says there needs to be some guidance from the federal government, Kurt Nagel, president of the American Association of Port Authorities, doesn't want government getting too involved.
“I think there is a benefit in having that decision making at the local level where they recognize their market, they know what cargo is flowing through their ports and has the potential to flow through the ports,” Nagel said. “They know what their strengths are, what their weaknesses are, and then they can make that determination at the local level with their local resources whether that investment makes sense or not.”
Despite predictions of the expanded Panama Canal dramatically changing worldwide shipping, no one can say how it’s going to change and which ports will benefit. The only thing certain is the number of options available to shipping companies will increase. Economists say more options mean more competition, and that keeps prices for goods from rising too much.