For those who are not aware; The Panama Canal is being upgraded to handled mega-container ships and should be finished in a few years. Now that NS has upgraded it’s Crescent Corridor and other projects; is it time for both NS & CSX be investing even more into their intermodal networks by improving capacity in the gulf coast regions.
Once the Panama Canal upgrades are finished; most of the ports on the east coast are not able to handle the bigger ships. If the gulf ports are expanded and the eastern railroads invest in capacity upgrades. Could NS & CSX dominate over trucks over the shorter distances.
When I say shorter distances I mean the shorter distances between the urban regions in the eastern part of the US.
Primary onus is on the port communities themselves to upgrade the port facilities (dredging) to be able to handle the larger ships. Once the ports are on the path the handle the larger ships the rest of the shipping community won’t be far behind.
Do you have some insight that suggests that the container traffic now traveling either via the Suez Canal to East Coast ports, or via West Coast ports and overland, is going to flip to Gulf Coast ports? If so, how much? And why Gulf Coast ports and not East Coast ports?
I know there’s been a lot of breathless hype in the national media about the Panama Canal’s expansion, but have you seen any of it that is actually attached to the actual strategy of shippers and liner companies? Because I go to the conferences and read the trade literature that comes out daily, and I’m not seeing or hearing much of anything that could be categorized as actual plans to shift traffic away from either the West Coast or the Suez Canal to the Panama Canal.
Within the last month or 6 weeks, RWM posted on some other thread here a heckuva analysis of the competitive merits of the various port groups for traffic via the Panama Canal, the Suez Canal, ‘land-bridge’ rail, and maybe some others. It’s recommended reading - well worth the effort to search for and find it. His comment above is only a small fraction of that.
Further, your basic premise is both premature, and late. Premature, because the NS ‘Crescent Corridor’ is nowhere near finished - among other segments, the portion parallel to I-81 in Virginia hasn’t even been started yet. For example, see “Norfolk Southern thanks state partners in Crescent Corridor stimulus application” at http://www.nscorp.com/nscportal/nscorp/Media/News%20Releases/2009/tiger.html Late, because about 2 months ago NS and UP announced a joint marketing effort for chemicals along essentially the same route - see “Union Pacific Railroad and Norfolk Southern Introduce Gulf Coast Flyer for Chemical Shipments between the Gulf Coast and Northeast, Southeast” on Oct. 26, 2009, at -
Within the last month or 6 weeks, RWM posted on some other thread here a heckuva analysis of the competitive merits of the various port groups for traffic via the Panama Canal, the Suez Canal, ‘land-bridge’ rail, and maybe some others. It’s recommended reading - well worth the effort to search for and find it. His comment above is only a small fraction of that.
Further, your basic premise is both premature, and late. Premature, because the NS ‘Crescent Corridor’ is nowhere near finished - among other segments, the portion parallel to I-81 in Virginia hasn’t even been started yet. For example, see “Norfolk Southern thanks state partners in Crescent Corridor stimulus application” at http://www.nscorp.com/nscportal/nscorp/Media/News%20Releases/2009/tiger.html Late, because about 2 months ago NS and UP announced a joint marketing effort for chemicals along essentially the same route - see “Union Pacific Railroad and Norfolk Southern Introduce Gulf Coast Flyer for Chemical Shipments between the Gulf Coast and Northeast, Southeast” on Oct. 26, 2009, at -</
Yes - absolutely - that’s why I left it off my short list of ‘no longer relevant / too far to get to’ ports above. Instead, I see Hampton Roads/ Norfolk as the only competitor - and actually the dominant ‘market maker’ - south of New York City to as far down as around the Wilmington, N.C. area, and then Charleston, SC and Savannah, GA.
I must be missing the big picture here. After the canal is enlarged, bigger container ships can pass through. Where do those ships generally go from there?
Here’s the link to the other thread on this that I mentioned above - “Effect of Panama Canal on intermodal” - which presently consists of 3 pages and 31 posts, starting at:
That is the key question. These ships will all be deep draft. The US Government is no longer digging out every coastal bay on your dime. Dredging out the local harbor with local money in the hope that “they will come” is not a smart move.
Look at the West Coast, with which I am more familiar. Seattle and Tacoma on Puget Sound are both naturally deep harbors. I suspect, but do not know, that each incurs dredging costs at the acual docking spaces at least. Those costs are passed on to the steamship companies. For whatever reason both Seattle and Tacoma have been loosing market share to Vancouver BC, where the national government does pay for dredging. I can not state to what extent this shift is due to dredging cost differentials as opposed to other factors.
Portland Oregon most resembles the typical East Coast port. It is over 100 miles up the Columbia River and is limited to about 40 foot draft. For the moment this is fine for bulk grain and potash but Portland handles very few steamship containers because of access issues and “load centering”.
Load centering is a steamship term for putting all of your eggs in one port. Steamships are like trains in that they only make money when they are moving. They are also characterized by decreasing costs per unit as the size of ships increases. This latter point is what drives the aggitation for a bigger Panama Canal. The big, low unit cost ships make the most money when they run full from Port A to Port B and back again. For that reason the liner operators “center” all of their loads for a US coast in one or two ports, rather than use the ship as a “peddler” up an
This all sounds very familiar to those who live around the Great Lakes and remember when the St. Lawrence Seaway was built. Ocean traffic to ports on the Lakes was relatively good for about 10-12 years despite the short shipping season but began to dry up with the growth of containerization. About the only ocean traffic to Great Lakes ports now is for bulk grain traffic.
And also the decline of manufacturing, its raw materials, and exports of same from the Upper Midwest ‘Rust Belt’; the completion of the East-West Interstates such as I-70, I-80, and I-90 that facilitated fast and cheap trucking to the East Coast cities and their ports for export, and back in for imports; and the trend towards fewer and bigger ships, etc.
I do not have insight but I think it is the most likely model. I mean from the Atlantic end of the Panama Canal it is a very easy strait shot to the gulf ports. Although all the ports in the gulf and east coast are going to need dredging and expansion of piers; it would probably be easier to upgrade the gulf ports since the rail route headed to the northeast and mid-west are now being upgraded for more and faster trains.
I did not think much of our goods came through the Suez Canal; even many of the goods going to Europe doesn’t go through the Suez Canal.
Mileage and time from Shanghai to selected US Ports via Panama Canal, at 10 knots, in nautical miles:
Houston – 10,138, 42.2 days
Norfolk – 10,391, 43.3 days
NYC – 10,582, 44.1
So, for Houston, a savings of 4.2% of the miles and 4.3% of the time, to get the box on the ship up against the birth, compared to Port of NY-NJ.
Where do you see the cost and time advantage of the Port of Houston (or any Gulf Coast port) for any East Coast or Ohio River Valley market, after the rail transit time and cost is added? Who will be paying for the substantial investment in port and rail infrastructure it will require, as there is no significant spare capacity on any rail route leading from the Port into the interior of the U.S.? And who is upgrading routes for more and faster trains, as you mention above, and for what traffic are these routes being upgraded?
Current market share of U.S. East Coast import containerized traffic originating in Asia is 22% Suez Canal. The usual split point is Singapore: traffic north of Singapore goes U.S./Canada West Coast/rail or Panama Canal; traffic south of Singapre goes Suez Canal. Southeast Asia accounts for about 1/4 of the Asian import traffic to the U.S., so in other words, no one is hauling coal to Newcastle.
I figure that even though the time savings is on a day or two; the fact the containers are already on trains after a day in port and on their way to their destinations. I look at it this way; while a ship arrives at New
Thanks for telling me the source material you’re using. I think you’d be much better off using Google with search terms such as “containerization, market share, asia, north america, panama canal.” That will take you to a lot of professional documents, powerpoints, etc., that will have more accurate information.
There is virtually zero container traffic landing on the U.S. or Canadian West Coast, getting onto a train, getting of