Panama Canal expansion may be “game changer” say supply chain analysts

Another component of the Panama Canal expansion, the report noted, was that cargo could more viably reach the U.S. East Coast via all-water routes and then be transloaded west to demand centers in the Midwest as far as Dallas.

By ·

As the 2014 deadline for the completion of the $5.25 billion Panama Canal expansion project gets closer, the ramifications it will have on supply chains and industrial real estate are abundant, according to the findings of a report issued by global real estate firm Jones Lang LaSalle (JLL).

In the report, JLL describes the Panama Canal expansion as a “global game changer” for a number of reasons.

These include:

*higher oil prices driving carrier lines to bring “Post-Panamax” vessels into service now.
*lower shipping costs per twenty-foot equivalent unit (TEU as a result of larger ships transiting the new set of locks.
*the re-setting of trade routes as Asian companies gain better access to not only East Coast U.S. markets throughout the Americas but also across the Atlantic.

Logistics Management – a sister publication of SCMR—shared these observations in a preview presentation of this report earlier this year.

Another component of the Panama Canal expansion, the report noted, was that cargo could more viably reach the U.S. East Coast via all-water routes and then be transloaded west to demand centers in the Midwest as far as Dallas.

“There has been this invisible line running north and south around Memphis to which product destined for markets west of that have traditionally come through the Ports of Los Angeles, Long Beach, Tacoma, or Seattle,” said John Carver, head of JLL’s Ports Airports and Global Infrastructure Group. “And markets east of that line have found opportunities coming through an all-water route through the existing Panama Canal.”

And for shippers looking to position their facilities and optimize their distribution networks, Carver explained there will be more viability in East Coast port options, which will open the door for real estate development and vertical facilities and transactional work in those areas on the Eastern seaboard.

This development, though, is not necessarily a threat to the Ports of Los Angeles/Long Beach, said analysts, because that market will continue to grow from other trends in the industry and the 40 million population base it serves within a one day drive of those ocean cargo gateways.

For related articles click here.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
Just Released: Understanding Hazmat Transportation Management
The rules and regulations governing the transportation of hazardous materials (hazmat) are complex.
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...