HOUSTON -- A delegation of Houston and Harris County politicians and business leaders will travel to Panama on Tuesday hoping their efforts, and a widened Panama Canal, will mean billions for the local economy and the state of Texas.
"If we do our job right, we have enhanced economic prosperity for this region for decades,” said Port of Houston Authority CEO Alec Dreyer.
An expansion of the Panama Canal began in 2007. The project, scheduled for completion in 2014, creates a new lane of traffic that will accommodate the world’s largest cargo, tanker, and container vessels. The Port of Houston Authority is positioning itself to benefit from that new traffic: vessels unable to reach Houston through the Panama Canal now.
"Once it’s more efficient to bring that cargo right into Houston, it's going to make it much more efficient to get it into the heartland of America,” said Dreyer.
The largest cargo and container vessels from Asian ports are usually bound for West Coast ports like Long Beach or Los Angeles, California. That cargo then has to be shipped by train across the Rocky Mountains to reach destinations in the central United States.
The widening of the Panama Canal means those vessels have another option, a better option according to Houston business leaders, that will put cargo on a wider network of trains for quicker, cheaper transportation to those same Midwest destinations.
“Anything that middle America needs we can bring through the Port of Houston,” said Harris County Attorney Vince Ryan, who will be among the local leaders making the trip to Panama.
"It is historic. It is a game-changer and it is huge for Houston,” said Jeff Moseley, CEO of the Greater Houston Partnership, who will also be part of the delegation. “It has Houston written all over it."
The Port of Houston Authority predicts a 15 percent increase in containerized cargo traffic in the next few years and a potential 150 percent increase by 2030. The greater Port of Houston is already ranked 1st in the U.S. in foreign tonnage and 1st in U.S. imports.
"It really points towards Houston gaining a tremendous number of jobs and adding to our tax base, becoming a logistics hub and distribution facility, not unlike Long Beach, California,” said Moseley.
“The economic opportunities and growth that this can result in will be tremendous,” added Ryan
The delegation of about 15 people will meet with Panamanian officials and sign a memorandum of understanding with the Panamanian government.
While watching the embedded video (have a look, eh, lol) ONE question, of course, arose ..
'Panama Effect' keeps West Coast guessing 02 Dec 2011
The benefits of the expanded Panama Canal might bypass US west coast ports completely. Credit: De Vern
What might be called the Panama Canal Syndrome is keeping port planners and executives on the alert over the effect the widened canal will have on US West Coast port traffic.
Furrowed brows greeted the original announcement, followed by consternation and a sense of resignation that the East Coast would take a much bigger share of box ship arrivals. With little more than two years to go the feeling is that the new canal will most likely present another option for commerce, industry and carriers.
Says Wilbur Smith Associates economist Paul Bingham: "There is probably a general consensus of a reduced impact than was previously thought, but there are those who have remained cautious about assumed additional diversion and market share shifts from the new set of larger locks all along.
"I think the Panama Canal is careful to not claim they are going to compete to take much market share from others, such as the North American railroads or West Coast North American port/rail systems. The Canal Authority management has been clear for a decade that the primary reason to expand the Canal was that they were approaching maximum annual throughput capacity and therefore felt both pressure and opportunity to expand to provide needed additional transit capacity.
"If they didn’t expand," continues Paul Bingham, "they would lose market share as trade volumes grew but their capacity remained fixed, forcing cargo elsewhere. The expansion was not characterised in their own planning just as an attempt to capture new market share, but to hold on to existing market share. Clearly the financial risks they undertook were substantial, and provide ongoing pressure after the new locks are completed to gradually continue to raise tolls."
This is largely the view of port management themselves. Linda Styrk of the Port of Seattle sums up the thinking: "The cost structure will largely determine the pattern, with the inter-modal aspect having to be taken into account. We don't yet know what the tolls will be and how they will be structured – they will obviously play a part in determining how much traffic goes through there."
She sees Panama also as a help for the "four-corners strategy" of shippers and traders today, which avoids too much reliance on a single port. "Shippers use gateways in different regions, which allows them to plan logistics more efficiently and greatly reduces the risk of hold-ups and traffic dislocation. So, Panama helps to spread out the traffic load."
Some port executives speculate that the recent tie-up between the ILWU dockers' union – which controls the whole West Coast – and the Panama Canal pilots could add to shipping costs. They are wary about the ILWU persuading the pilots to hike up wages and pilotage fees. This view is discounted by others, who see the link as a political gesture by the ILWU to claim international status. .. http://www.portstrategy.com/features101/area-survey/north-america/us-west-coast/the-panama-effect-keeps-the-west-coast-guessing
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