A new episode of shipping wars has begun this week, and unlike A&E series of the same name, there is a lot more at stake. As the Panama Canal welcomed the largest vessel to date in its waters, the East and West coasts entered into a battle of trade routes. The west coast has long enjoyed the market share of the trans-pacific, but severe congestion became an issue. A desire to get a stake into the market and to ease traffic on the routes, spurred investment into Eastern and Gulf ports. Ultimately, billions of dollars have been poured into dredging to make way for larger ships to enter the waterways on the Eastern seaboard.
A Big Step
This week the investment is seeing signs of payoff as an Asian cargo ship the length of the Eiffel Tower passed through. Next, a Chinese vessel will be the largest of its kind to dock on the East Coast at Port of Virginia. The new name for these ships are “Neopanamax,” as they would not have made it through the canal prior to the expansion. PortMiami is expecting Neopanamax ships to call on its port later this year as they have shelled out around $1.3 billion for expansion. Specifically, to have the capacity to handle these ships. In addition, other Eastern ports also have plans to dredge in the near future.
In the first quarter, cargo volume is up 7 or 8 percent on trans-Atlantic and Asian routes. The original waterway allowed ships with the capacity of 5,000 TEUs pass through. Now, with deepening waters, vessel capacity can go up to 13,092 TEUs. South Carolina is investing in deepening both Savannah and Charleston channels that will be completed within three years. Meanwhile, Port Everglades in Florida is both deepening and widening channels between 2021 and 2024.
The shift in routes of Asian imports to the U.S. from the West Coast to the East is enough to worry Western ports. Although, analysts predict that more cargo will enter the U.S on the East, that it will not become the new stronghold. Most likely in upcoming years it will shift to more of an even split. So, if the West Coast wants to remain the key player it will have to have to put more money into its waterways. As they say, it is time to shape up or ship out.