Canal capacity

The Panama Canal can now handle ships 965 feet long that need a water depth of 39.5 feet, a size known as “Panamax.” Once the expansion is completed in 2015, the canal will be able to accommodate “post-Panamax” ships that are 1,200 feet long with a 50-foot draft. Shippers are already building to those dimensions.Source: Miami Herald

BUENAVENTURA, Colombia — Standing atop a hulking crane at this country’s largest Pacific port, Alejandro Echeverri pointed out scurrying workers below reinforcing pylons, preparing the ground for an extended pier and tending to a dredging boat that has been deepening the harbor.

As the planning director for the Buenaventura Regional Port Authority, Echeverri says his job is to be a “futurologist” and try to stay ahead of the industry. Right now, the industry’s future is high stakes and under the sway of a singular event: the expansion of the Panama Canal, which will make ships larger and heavier than these ports have ever seen.

The industry “doesn’t care what ports need to do to be ready or what it costs,” Echeverri said. “If you’re not ready, they’ll simply take you off their route.”

Ports throughout the Americas and the Caribbean, including Charleston, are rushing to be ready for the expanded canal. Ports in Costa Rica, Peru, Jamaica, the Bahamas and Cuba, among others, are either expanding or have plans to expand.

Some, like Buenaventura, hope to receive the bigger ships and become a trans-shipment hub that will supply smaller ports with feeder vessels. Others are simply bracing for increased feeder traffic.

“For the second time, the Panama Canal is going to divide the history of shipping,” said Domingo Chinea, general manager of the Buenaventura Regional Port Society, who is overseeing the $450 million modernization project. “All the ports along the Pacific are trying to get ready.”

Fierce waters

The race for deep water is fierce. Buenaventura currently feeds much of the traffic to the shallower port in Guayaquil, Ecuador. But Buenaventura is facing competition from Balboa in Panama, which is emerging as the Latin American leader of trans-shipment and expects to see its business double after the expansion.

The Bahamas is working with Hutchison Port Holdings to stake its claim as the most modern container facility in the English-speaking Caribbean. With a depth of 52 feet, the Freeport Container Port already can accommodate the longer, heavier “post-Panamax” ships.

“We have the necessary equipment to handle the traffic and if we need more, we will get it,” said Ian Rolle, president of the Grand Bahama Port Authority. “Having a harbor that is deep enough to accommodate these ships is key.”

In many ways, all of the ports in the region need to succeed for any of them to succeed, said shipping consultant German Silva, Colombia’s former vice minister of transportation.

If only a few ports in a geographic area can accommodate the massive new vessels, then shipping companies may decide to cover the region with feeder boats, which ultimately increases the costs of goods.

Of 161 ports in South and Central America, only 21 have channels with depths of 50 feet or more, and 13 of those are in Brazil, according to data provided by the American Association of Port Authorities. Colombia, Argentina and Chile also have deeper ports. In Mesoamerica, only Mexico and Panama are in that league. But several ports in the regions have plans to hit that depth.

“If ports don’t get ready, they will simply be left out,” Silva said.

Competition

What is clear is that the canal expansion, along with the regional building binge, will mean more Latin American countries will benefit from, and depend on, the canal.

Chile is currently the third largest user of the canal after the United States and China, and nearly one-third of its maritime foreign trade is transported through the canal. Some 37 percent of Ecuador’s maritime foreign trade travels via the canal and 32 percent of Peru’s, canal authorities said.

“We’ll see more Latin American countries making use of the canal” after the expansion, said Jorge Quijano, chief executive of the Panama Canal Authority.

But the race to become competitive extends well beyond harbors and cranes, said Anton Edmunds, a Caribbean business consultant. Ports need to think about financial services and other infrastructure to attract shippers.

In Colombia, Echeverri watched workers pour fresh concrete to brace the port for the coming behemoths, and he marveled at how fast the industry has changed.

Just five years ago, the largest ships that pulled into Buenaventura carried 1,000 containers. Now, the port regularly receives towering vessels carrying 3,000 containers that can take two days to unload.

Few expected loads to double, much less triple, in five short years, he said.

“The only thing that is certain” about predicting the future of shipping, he said, “is that we’ll probably be wrong.”