Now in its testing stage and set to open June 26, the expanded Panama Canal is expected to alter the movement of goods around the globe – but will it?
Some analysts argue that the "Panama Canal is about to transform world trade again," as larger trans-Pacific container ships can now bypass congested ports on the West Coast and instead travel through the canal en route to East Coast facilities. East Coast ports could see a 10 percent share of container traffic from West Coast ports by 2020, according to How the Panama Canal Expansion is Redrawing the Logistics Map, a study by The Boston Consulting Group and C.H. Robinson.
The increase of cargo volume on the East Coast will be the equivalent of "building a port roughly double the size of the ports in Savannah, GA, and Charleston, SC," according to the report.
But the new facility doesn't guarantee any massive shipping transformation, according to Cliff Lynch, a logistics and supply chain consultant and owner of C.F. Lynch & Associates, who still sees many distributors and shippers preferring to use the nation's busiest ports in Los Angeles and Long Beach.
"I don't think we'll see a wholesale transfer of ships from the West Coast to the East Coast," he says, pointing to West Coast ports possibly lowering prices to give distributors a competitive reason to keep their shipping routes intact.
While the economic scope of the expanded Panama Canal is unknown, it will bring some change to the ways goods move and will at the very least provide relief in case of another West Coast port labor strike or other disruption, Lynch says.
"Bottom line: it's going to be a great alternative to the West Coast," he says. "It's going to be great to have that work valve in case of work slowdowns. Anything can happen at the ports."
