Panama Canal Expansion Update

The Panama Canal Expansion is the largest project at the Canal since its original construction in 1914. The project will create a new lane of traffic along the Canal through the construction of a new set of locks, doubling the waterway’s capacity. The existing locks allow the passage of vessels carrying up to 5,000 TEUs. After the expansion, “Post-Panamax” vessels will be able to transit through the Canal, with up to 13,000 TEUs. The expansion will double the Canal’s capacity. As of August 31, 2015, the project was reported to be just over 93% complete, with a target completion date of August 2016.

The race is on among American ports to handle the added container cargo capacity and significantly deeper drafts of “Post-Panamax” vessels. On the Gulf Coast, Gulfport, New Orleans, Mobile, and Houston have maximum berth depths of -45 feet (-14 meters) or less. None of these ports are currently funded to be deepened to -50 (-15 meters) feet, the expected draft depth accommodated by the Panama Canal Expansion. The U.S. Army Corps of Engineers is studying the feasibility of a potential $300 million effort to deepen the lower Mississippi River by as much as 5 feet for the Port of New Orleans, ideally situated for intermodal transport as the only seaport in the U.S. served by six Class I railroads, in addition to 50 ocean carriers, 16 barge lines, and 75 truck lines. Should the lower Mississippi River be deepened, the Port of New Orleans estimates an increase in container traffic by as much as 7 percent locally, and Gulf Coast ports could expect traffic to pick up by as much as 15 percent over the next decade.

Eric Winder Sella
esella@mblb.com