Expansion of the Panama Canal, which will allow the waterway to accept ships nearly twice the size of its current capacity, is on pace to meet a projected 2014 completion date, says Rich Thompson, executive vice president of Jones Lang LaSalle. Thompson was part of a group that recently toured the Canal project.
"The project actually is ahead of schedule and likely will be completed in 2014, which marks the 100th year anniversary of the opening of the Canal in 1914," says Thompson. The expansion and addition of locks will allow for ships to carry more than twice as many containers as they do now, which certainly will drive improved economies of scale and will lower ocean freight costs, he says.
The canal expansion also will change shipping patterns, says Thompson. "Two-thirds of the U.S. population is located on the East Coast. Instead of the traditional pattern of bringing goods into a West Coast port and trucking or railing them across country to demand centers in the East, large containerships will be able to go through the canal directly to East Coast ports," he says.
Thompson says there is tremendous speculation as to which ports will be winners and which will be losers. East Coast harbors like Charleston and Savannah are working to position themselves in the winners' column as is Miami, which is the closest U.S. port to the canal, he says. "These ports are doing the necessary dredging to be able to support post-Panamax vessels," he says. "There is only one port on the U.S. East Coast now capable of handling these ships and that is Norfolk. Not many people realize that," says Thompson.
The biggest importers - retailers like Walmart, Home Depot and Best Buy - are expected to continue with their port diversification strategies and stand to benefit most from the expanded canal, he says.
