Crux Systems Insights

Panama Canal expansion

July 21, 2016 by Eric Klein |

Shipping

The Panama Canal expansion is complete and we’re finally getting a chance to see the big ships pass through. The predictions of whether cargo will shift from one port to another will now be put to the test. Will the US East Coast take away cargo from California? If it does, it will have a ripple effect on rail and trucking services. According to the CCJ, even a 10 percent shift from the West Coast to the East Coast could result in major impacts to freight transportation patterns.

Given the current situation at the ports, where many terminals are dealing with congestion and are already close to capacity, the ability to streamline operations and move cargo more quickly through the terminals will become even more important.

If we do see a shift in cargo from the West Coast to the East Coast, it won’t be anytime soon. Frankly, I think things from a US port perspective won’t change much. Larger ships will pass through, and more cargo volume will certainly pass through. But it’s unlikely that the fundamental trade lanes will see major changes in the US.

The bigger changes will more likely occur in the shift in trade lanes between Europe and Asia, where more cargo will start to move from the Suez Canal to the Panama Canal. But that’s another story.