NCPA - National Center for Policy Analysis

U.S. Ports Racing to Get Ready for Bigger Ships

October 3, 2011

As the USA seeks to double exports in the next five years, ports along the Atlantic coast are at a critical crossroad.  Their fate is tied to the first major expansion of the Panama Canal in its nearly 100-year history.  When that project is completed in 2014, the canal's larger locks will be able to accommodate cargo ships with three times the current capacity.  Those larger vessels, known as "post-Panamax" ships, will be calling at ports here and elsewhere on the East Coast.  The problem:

  • The port in Norfolk, Va., is the only one on the East Coast that has a channel deep enough to accommodate the larger vessels.
  • As a result, other ports along the Atlantic Ocean are scrambling to dredge deeper channels so they can handle the bigger ships.

Officials say the Panama Canal expansion will mean some ships that previously had to deliver their freight to the generally deeper ports of the West Coast, where goods are moved mainly by rail across the nation, will be able to deliver goods more efficiently via all-water routes directly to East Coast ports.

  • Officials such as Page Siplon, executive director of Georgia's Center of Innovation for Logistics, say there could be a 25% to 30% shift in freight shipping.
  • A long-sought Port of Savannah channel-deepening project would result in 15% to 20% cheaper shipping costs, says Chris Cummiskey, Georgia's commissioner of economic development.
  • Consumers across the Southeast could see a direct impact from the project.

In his 2010 State of the Union address, President Obama announced the goal of doubling the nation's exports in the next five years.  The nation cannot meet that goal -- or compete successfully in an increasingly global economy -- without modern ports capable of handling the biggest ships.

  • Most of the Port of Savannah's business, 84%, is truck-size containers, which are used to ship products and goods around the world.
  • It's the second-busiest container port in the nation for the export of U.S. goods, behind only Los Angeles; it's one of the only major ports in the nation that exports more goods than it imports - 52.2% to 47.8% last year.
  • Savannah's port is a vital cog in Georgia's economy, second only to Atlanta's Hartsfield-Jackson employment, sustaining nearly 300,000 full- and part-time jobs, directly and indirectly. It also generates $61.7 billion in annual sales, worth $2.6 billion in state and local taxes.

Now, the state is rushing headlong to ensure it holds onto that development and prosperity, trying to complete the harbor deepening as close as possible to 2014. Savannah's channel is just 42 feet deep, making it one of the shallowest major ports on the East Coast. Officials here say that some vessels already have to wait for high tide before they can traverse the channel - an expensive undertaking.

"We're already seeing exports being left on the docks because there is not sufficient water capacity to get those export containers onto the vessels," says port spokesman Robert Morris.

Source: Larry Copeland, "U.S. Ports Racing to Get Ready for Bigger Ships,"  USA Today, October 3, 2011.

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