The multibillion-dollar Panama Canal expansion is one giant step closer to completion with the installation of the last of 16 massive lock gates.
The last gate weighs 4,232 tons and opens the canal to the Pacific Ocean. The next step will be to flood the locks, which is the most crucial aspect of the expansion project.
The canal expansion, which began after a referendum approving the project in 2006, will allow for larger vessels capable of carrying 2.5 times the number of containers that current ships are capable of holding. The project has been mired in controversy, with cost overruns and work stoppages pushing the completion date back a year to April 2016.
Expansion Won’t Affect West Coast Port Domination
The expansion of the canal is not expected to result in a large shift in cargo for West Coast ports to the East Coast, according to Moody’s Investor Service.
“In most cases, shipments from Asia to West Coast ports will arrive at inland destinations faster than via an all-water route to the East Coast through the Panama Canal,” Moody’s Analyst and report author Myra Shankin says. “Additionally, ports’ long-term contracts contain minimum annual guarantees, which will protect the West Coast ports from swings in cargo volume and revenues. However, ongoing labor and operational difficulties at West Coast ports could shift cargo traffic if not resolved.”
Still, it is expected that East Coast ports capable of harboring larger ships should see economic benefits. Specifically, the report names Norfolk, Virginia; Savannah Georgia; and Charleston, South Carolina.
Ports across the U.S. are working to deepen their harbors in preparation of the larger ships coming through the expanded canal. In the United States, public and private-sector partners will spend more than US$46 billion in improvements through 2016, according to the American Association of Port Authorities.