Study says Panama Canal expansion no fix for congestion
A Drewry Shipping Consultants study commissioned by steamship line APL said expansion of the Panama Canal will not be enough to ease future congestion at West Coast ports.
The study said that even with canal capacity expansion expected in the coming years to accommodate more all-water shipments between Asia to the U.S. East Coast, the waterway would not be able to handle longer-term needs.
'Unfortunately, given the high demand for all-water container services from Asia to the U.S. East Coast, the improvements capable of being made in the near term will not suffice over the longer term, and will not be enough to materially take the pressure off the North American West Coast,' APL chief executive Ron Widdows said in a statement about the study. 'Shippers who were pinning their hopes on all-water services to the East Coast as a significant relief valve will need to factor this into their supply chain planning.'
In a follow-up interview with American Shipper, Widdows said APL commissioned the study because it needed better information to make long-term plans related to cargo flows and its network development.
'One area where there seemed to be a gap is what's going on with the Panama Canal and its impact on the overall environment for shipping,' Widdows explained. 'While they will increase volume a bit, they are just accommodating near-term demand. At some point in time, depending on what kind of growth assumption you make, the canal becomes a constraint of some significance long before it might be expanded down the road.
'There has been a lot of discussion about future expansion and what should be done, but the doing will take an awful lot of years. Certainly over the next decade, the U.S. is going to continue to rely most heavily on the capabilities of the West Coast of the U.S. and the ability of intermodal infrastructure in the U.S. to move cargo to the major markets.'