The long-awaited expansion of the Panama Canal is complete and it is being hailed as a “game-changer…a bridge between the present and the future.”
The canal has been vital to international commerce for more than a century, but as the needs of global markets have grown, so have the ships that carry our freight. The expansion — the addition of mammoth locks — will now accommodate huge ‘neo-Panamax’ ships that could not reach the U.S. East and Gulf coasts through the canal before the new locks were built.
“There’s no doubt that the expanded canal will benefit the international shipping industry over time,” says Chris Cser, director of International at ICAT Logistics Detroit. “The question we have to answer now is: ‘What will it do for our customers?’”
The biggest impact will be on freight shipments between the U.S. East and Gulf coasts and markets in Asia Pacific, Cser said. Freight carriers have already begun to announce expanded Asia services using huge ships with capacities up to 10,000 – 12,0000 TEUs.
As they are headed through the canal to the East and Gulf coasts, these ships will reach ports that are still scrambling to make ready for their arrival. Channels are being dredged, bridges raised and budgets stretched by the need for updated infrastructure that will welcome the sea-going giants.
“In time we expect a shift of emphasis from the West Coast with more U.S. cargo handled at ports in the East, but that’s going to take a while, since many of the East Coast’s port dredging and infrastructure projects are insufficiently funded and behind schedule,” Cser explained.
The industry is certain to see change, he said, “but from ICAT’s perspective, the emphasis will always be on our continued analysis of transit times, costs and our clients’ distribution and service needs and strategies — the basics that are the real factors touching our clients’ business operations.”
The logistics industry is headed for major changes, analysts agree, and the increased capacity at the Panama Canal is a factor. If that improves service, ICAT Detroit will capitalize on it, Cser said.
Larger ships may be a boon to the industry, but they may also pose greater operational, environmental and commercial challenges and those will have to be evaluated and resolved over time.
“We see that kind of analysis as our job at ICAT,” Cser said. “Our task meanwhile is to make certain that every client’s freight shipment arrives safely to its destination, on time, at or below budget and with the total satisfaction of every party involved. That’s our ‘game-changer’ and we’re sticking to it.”
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