Panama Canal expansion “lot of hype”

The projected 2015 completion of the expansion and widening of the Panama Canal is causing a “lot of hype,” but will not drive a major change in maritime shipping options, a top intermodal executive is predicting.

When the project to widen the canal is completed in 2015, longer and wider ships will be able to pass through its locks, allowing big manufacturers shorter access to ports on the Gulf of Mexico and the East Coast. However, Paul Svindland, chief operating officer at Pacer International and a former Maersk executive, says that “at end of the day expanding the Canal does not affect demand patterns on the East Coast.”

Right now Port of Baltimore is one of only two ports on the East Coast—the other is the Port of Virginia in Norfolk—that can handle the large, post-Panamax cargo ships. Baltimore recently completed a major expansion, which included building a 50-foot berth and dredging the channel.

However, Svindland is predicting that the effect of the Panama Canal expansion will be more focused on giving maritime carriers greater options in the way they utilize their vessels, rather than changing domestic shipping patterns. “What I think you may see is a change in the carriers and the type of vessels they put in the market place,” Svindland says.

The biggest impact on shippers may be on rates, Svindland adds. “Rates may soften because there will be (more) capacity.”

Stevan Bobb, executive vice president and chief marketing officer at the BNSF Railway, aggress. “Whatever should shift to the East Coast already has shifted there,” says Bobb.

“We don’t anticipate any substantial change, and it’s up to us to provide the service from the West Coast ports to make sure it doesn’t change.”

Svindland and Bobb made their comments during a question and answer session following release of the 24th Annual State of Logistics Report.