Panama Canal Expansion?

Here's a few for starters:

Larger ships will be able to pass. More traffic will pass. The west coast ports of the US will become less congested with ships being able to reach gulf and eastern ports from  Asia. It will shift the intermodal container traffic, well some of it. Perhaps Lionel's stuff will be able to unload at Baltimore to reach North Carolina. Cargo on a ship stays secure until it reaches port. Think of the governments in the countries the trains would have to travel.

Besides, the archeologists are getting more clues to many questions.

A similar discussion made national news several years ago when Warren Buffet, (Berkshire Hathaway), made huge investments in the BNSF rail system. The pending Panama Canal rebuild was already being considered.   

IMO, the success of Berkshire Hathaway, would tend to indicate, that major investment requires some research into world changing events.  A simplistic view of the investment in BNSF from a know nothing, like me, would indicate that changing the Panama Canal has some effect on overall transportation, but not make or break financial impact on rail transportation in the USA.  Again IMO.  

I read a story a couple of days ago that the expansion of the Canal may be put on hold. apparently the major contractor has run into cost overruns and is demanding somewhere between 1.2 to 2 billion dollars immediatly or they will stop the construction--- which at this point is over 50% completed--- be interesting to follow this----

The Chinese would like to build a second canal in Nicaragua to compete with the present canal, and to extend their influence into Central America. Presumable the second canal would be larger than the Panama Canal and be able to accomodate larger (wider) container ships.

So intermodal rail traffic may shift...but the growth on intermodal rail should continue due to improvements in speed and inherint efficiency over trucks?

You should read about this in the trade magazine, really neat how KCS operates down there.

The PC is a toll road, and I would expect those tolls to go up.  Going by ship that way to the East Coast is the round about way to get there, I think it is going to be a wash.

Also discussion as general global warming takes effect of the Northwest passage and an ice free Artic Ocean.  Henry Hudson may still be stuck in the ice there. 

Please don't forget that not all shipping goes to the USA!  A very large amount of canal traffic is heading for Europe and Africa. 

The entire point of widening the Panama Canal is to allow the larger Panamax ships to access gulf and east coast ports. Which would be cheaper than transloading to rail for an overland passage. The port of Long Beach is critically congested (to the point that some containers don't clear US customs until an inland point). Here in the NYC area there has been great clamoring over the raising of the Bayonne Bridge roadway to increase clearance for these larger ships. The port of NY/NJ is so concerned about losing the ship traffic to Baltimore or Philly it is over-extending itself to do this project.

Keep in mind that the French failed at the first attempt at the Panama Canal. Two developments that allowed the US to succeed.  Removal of Mosquitos, and the development of a unique lock system that utilizes the tremendous amounts of water available in the Panamanian Rain Forest.   It is anything but a level ditch across the isthmus.   IMO   Mike

Related to the canal expansion is the issue of how the larger containers will have trouble moving inland from the Port of Baltimore. We've had several articles in the last few years discussing this. Here's one from 2012.

The Port itself will be fine. The problem is moving larger container cars through the venerable (built in the 19th century) Howard Street tunnel.

http://thedailyrecord.com/2012...east-coast-commerce/

Water transport is slow and cheap, road transport is fast and expensive, railroads are between the two (and air transport is really fast and really expensive, best suited to relatively small high-value or high-priority items.) If the cargo doesn't have an expiration date and/or its shipment can be planned months ahead, it makes sense to use water as far as possible. Compared to the long and often difficult trip around Cape Horn, a canal big enough to hold bigger ships is a win even with toll. It's not as much as I thought--looks like a full container goes through for $72 right now:

http://www.pancanal.com/eng/op/tolls.html

It has taken a while to get container trafic this far up the rivers, but there are now intermodal facilities on the Ohio and we've seen barges full of containers upbound. Stuff like seasonal merchandise can go up cheaply.

The Nicaraguan route has been argued for a long while. IIRC, it's a technically better route for several reasons, but it's closer to a very active fault line and the political situation isn't always stable there.

--Becky

There may be a mild shift in container traffic with respect to the west coast ports, but the new BNSF facility being constructed will speed up the transfer of containers from ship to train. The time of delivery from west coast to east coast by rail is still a couple to a few days faster than having the ship go through the canal to the east coast. Time will tell how things shake out.

Existing Panama Canal. Wikipedia.   It's been 100 years.  Elevation difference (85 ft) As I mentioned before it operates by the grace of the all mighty and all that tropical forest rain. 

The January TRAINS magazine as an excellent article about containers and the canal. The panama canal railroad could be modeled.   

 The NS predicts higher volumes of inter modal traffic from Asian shippers thru the Panama Canal and that's one of the main factors for the big push for the completion of the Crescent Corridor,and the Prichard Inter modal Facility in WV.

 In fact ,the state of WV told the contractor if they complete the site a year earlier,2014 instead of 2015,there's an $8 million dollar bonus awaiting them,and it's due to expected business with the completion of the upgrades on the canal.Not sure what business their talking about,but that's what's being told to the contractors.

If you are looking at the railroads, look at CSX, NSC and CNI.  CNI has access to three coasts.  CSX and NSC are shifting their emphasis from depending on coal to intermodal.  I live about 1/4 mile from NS tracks out of the Inland Port in Front Royal, VA.  Boy is that place busy.  Traffic on the rail going from north to south is very long trains and the containers are full.  All three of those railroads are solid growth prospects.

 Here's a post from "The State Journal" that's on the Rahall Appalachian Transportation Institute  that speaks of the Prichard WV site I mentioned and the benefit of the Panama Canal expansion .

 

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 The RTI site has some intersting information on it.   www.njrati.org    .

There is the PANAMA CANAL RAILROAD that was built with assistance by Mike Haverty of the Kansas City Southern. That railroad was quickly laid in place to move containers with less ships having to enter the Panama Canal.

One thing they forgot to take into account were the migration patterns of Turtles as shown in the current issue of Trains.

Andrew

Just remember that 2/3 of the US Population lives east of the Mississippi yet two thirds of the import container traffic enters the US on the West Coast.

Will there be a shift of container traffic from the West Coast to the East Coast... the most likely answer is yes and the reason is its cheaper to do so!  Transport by vessel is the cheapest type of transport!

Norfolk, VA will probably see the largest increase in that traffic for a number of reasons.  It is centrally located on the east coast.  Deep water access (50 foot channel) and excess capacity at the Marine Terminals.  They are also planning to build a super terminal at Craney Island for completion in 10 to 15 years.  With the opening of the expanded PC I would expect that Norfolk may overtake NY as the largest container port on the east coast.

I think Nicole made a very good point above. Rail will be the mode of transportation for Canada, Mexico and the U.S.A., But most of those big ships that will use the larger access to the canal will be headed for European and African ports.

If we take a look at the shipping routs around Indonesia and East Africa, many pinch points can be avoided where pirate activity is rampant by making a bee line from China, S.Korea and Japan through central America.

When the old Soviet Union and American Navies where reduced after the cold war piracy exploded due to the increase in world shipping. Less police, more pirates means higher cost to move freight over the high seas.