Ports, Shipping Companies Retool Before Panama Canal Expansion - Project Delays, Cost Overruns Haven't Halted Global Efforts

From The Wall Street Journal:

The world's biggest ports are dredging deeper and shipping companies are building even more mammoth container vessels as a European consortium undertakes a major engineering challenge—a multibillion-dollar widening of the Panama Canal.

 

The prospect of delays is also prompting local officials who undertook, or are planning to undertake, expansion port projects to ponder how things will play out. Ten of the largest East Coast and Gulf Coast ports are planning projects costing more than $11 billion to dredge deeper, upgrade terminals and add super-sized cranes over the next several years.

Some ports, such as those in Baltimore and Norfolk., Va., were already deep enough for the neo-Panamax vessels. Others, including ports in New York and Miami, were racing to be ready by late 2015, jockeying to win more traffic in the expected shuffling of trade routes that the larger ships are expected to trigger.

The idea was to cement business deals before other ports caught up.

"We thought we had a window of seven to 10 years to just make hay of our natural assets," said Joe Harris, spokesman for the Port of Virginia, which can already take neo-Panamax vessels. "Maybe that window is shortened a little bit."

Jacksonville, Fla., Savannah, Ga., and Charleston, S.C., could benefit, analysts said, because they'll now have more time to catch up to ports that had begun expanding earlier. Savannah is hoping to dredge to 47 feet by late 2017, two years beyond the date canal officials say they hope to finish. Charleston is aiming to reach 50 feet by late 2018.

In Miami, multiple interrelated projects—the underground highway to the port, dredging from 42 feet to 50 feet, and the installation of new cranes—will cost $2 billion. All of it is carefully times to the completion of the canal's expansion.

Just days before the delay in Panama began, Bill Johnson, PortMaimi's director, touted the foresight of preparing for bigger ships "as the model success story in the nation."

In the midst of the delays, he said that "if it drags on for years and years, that's not good."

Still, there is a sense among those closely following the delays that no matter what happens, ever larger ships will dominate and a deeper, widened canal will be part of the equation.

"It's too important to the world," said Curtis Foltz, executive director of the Georgia Ports Authority. "It is going to happen."