RIPPLES FROM PANAMA CANAL EXPANSION WILL EXTEND TO HOUSTON PORT AND SURROUNDING REGION

Published 04/15/2010 - 5:36 a.m. CST
"The impacts of the Panama Canal widening will filter to the Houston region," said DougSethness, vice president of the Houston firm CH2M Hill and a principal project manager/program manager for the Panama Canal expansion project.
“We think the Panama Canal expansion is a game changer, but we are not sure yet how it is going to change,” Sethness told

Cy-Fair Houston Chamber of Commerce Transportation Committee members at an April 1 meeting.
The expansion project, which will be completed in 2014, will allow larger ships to travel through the canal. Larger ships can carry more containers, which could equate to greater loads coming into the Gulf Coast area and more truck and rail traffic handling those containers.

However, Sethness said, the Port of Houston is not a deepwater port – that requires a 53-foot depth – but Brazosport is getting there. Gulf Coast ports are making changes to accommodate the larger ships that would be able to travel through the Panama Canal after 2014.

But there is more to be done, he said.
“We need intermodal improvements in Texas,” he said. “We need to improve our infrastructure to the heartland and other Gulf Coast states. We need focused logistics education programs in schools.”

The Panama Canal expansion project is creating a set of three new “locks,” which lift ships up to the main elevation of the Panama Canal, and widening different portions of the canal to allow for two-way traffic in some areas.
The current two-lock system opened in 1914 is about 900 feet wide and accommodates ships with a 40-foot draft. The new three-lock system will be about 1,200 wide and will allow ships with a 50-foot draft.
“The ships going through it today take up every inch of space,” Sethness said. “Often they scrape their way through.”

There are three primary load center ports in the U.S. – Seattle/Tacoma, Los Angeles/Long Beach and New York/New Jersey. He said the U.S. is importing less and exporting more.
The Gulf ports, which include all ports along the Texas and Lousiana coast, are further down on the list. The trade there is primarily for the petrochemical industry.

After World War II, many consumer products were made in Japan and ships carrying those items could travel to Los Angeles/Long Beach or through the Panama Canal to New York/New Jersey.

“As costs got higher we started buying things out of Korea, and they travelled the same way,” Sethness said. “In the China decade we followed the same route.”
“Now we are looking for a cheaper place to buy goods, and manufacturing plants are opening in Singapore and Malaysia,” he said. “They can travel through the Suez or Panama canals.”

As the manufacturing hubs move west to India, and eventually Africa, the Suez Canal could become the dominant route, Sethness said.

“For first time we are seeing price wars between the Suez and Panama,” he said.
Currently it costs about $150,000 – 200,000 for ships to travel through the Panama Canal, and they are lined up waiting.

“All major (U.S.) ports are putting money into increasing the size of the ports,” Sethness said. “We could possibly go into an overcapacity situation.”

“The biggest potential risk is we face is over-building in our current economy,” he said.

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