More than over $6 billion dollars’ worth of freight moves through the sea ports in the United States every day1. The Panama Canal expansion has ignited many sea ports to update their infrastructure to accommodate an expected increase in freight volumes. As of September 2015, the Panama Canal was 93% complete and is still expected to finish by early 2016. The expansion paired with current increases in volume is contributing to the estimation that container volumes will reach 60 million a year by 20372. With the expected increase in volume, are U.S. sea ports and your operations ready for its impact?
Ports Plan for Volume
Since then, many companies that diverted their freight to the East have decided to continue with that route long after a resolution was reached in the West3. In June, there was a 15% increase in the amount of imports coming through on the East Coast. Once the Panama Canal is completed, volume is only expected to increase. Many estimate that by 2020, it will increase by an additional 10%4. Consider the impact that the increased volume may have on your freight and re-evaluate if adjustments are needed to keep your operation running smoothly.
Larger Ships, Deeper Water
The Panama Canal is being expanded and in response, carriers are producing post-panamax ships. These larger ships help address capacity issues as they can carry about two and a half times more than previously produced ships5. Many ports along the East Coast are undergoing, or planning to undergo, dredging projects. Dredging deepens the waterways and makes it easier for the post-panamax size ships to navigate through the channels. The ports of New York, New Jersey, Savannah, Philadelphia, Delaware, Houston, Charleston, Miami, Georgia, and South Carolina are all working to improve their infrastructure though some type of dredging project. The ports of Norfolk and Baltimore are already deep enough to contain the post-panamax ships. These ships are so much larger that the ports of New York and New Jersey are working to increase the height of the Bayonne Bridge from 151 feet to 215 feet6.
Roads and Rails
Water depth is not the only troublesome issue. There is concern that the highway and rail systems around the ports will not be able to adapt to the growing volume. Congestions around the ports can directly affect the productivity at the ports. Something as miniscule as a traffic light can create congestion and make it difficult to move freight. The ports need to invest in the highway and rail systems so that the paths throughout all modes of transportation are clear. Some shippers have worked around traffic issues by turning to rail systems. The Port of Miami has taken on the initiative and recently built a new tunnel to connect to the nearby interstate highway system7. Innovations like this will allow for consistent flow of goods in and out of the ports.
These larger ships will be bringing in more containers so there needs to be enough space and power to continue to keep the freight moving. Aside from the highways, many ports are investing in equipment. For instance, the Port of Miami invested in new gantry cranes and on-deck intermodal service linking to improve distribution. The linking enables shippers to reach 70% of the United States population in four days or less8. A few ports have also put in more places for reefer containers to plug-in to be mindful of temperature controlled goods9.
The updates to the ports along the East Coast and the South are setting a new standard. These changes are forcing other ports, especially on the West Coast, to innovate and improve their infrastructure as well. As history has proven, ports can experience a variety of issues and volumes can always shift so it’s important that shippers, ports, and surrounding areas can react and accommodate. To address these challenges and ensure your freight continues to move, shippers can benefit by partnering with 3PLs that offer integrated solutions. As the Panama Canal nears completion, ports will also continue to make improvements to move our goods.