ISLE OF PALMS — The $5.3 billion Panama Canal expansion project has U.S. ports scrambling to provide the deeper water needed by huge container ships, but shipping industry executives said changes caused by the canal expansion won’t happen all at once.
That’s good news for the Port of Charleston, which is not expected to complete a channel-deepening project before the wider, deeper Panama Canal is opened in April 2015.
Alberto Aleman Zubieta, the former administrator and CEO of the Panama Canal Authority, gave shipping and port industry executives at the International Trade Conference on the Isle of Palms an update on the expansion Tuesday. “I think that one of the main beneficiaries will be the U.S. East Coast and Gulf Coast ports,” he said.
Essentially, the canal project should tilt the scale toward the East Coast, when it comes to deciding which ports make the best financial sense for cargo from the midwestern U.S. Grain and coal shipments from the eastern U.S. to Asia should become more competitive.
The expanded canal will allow ships carrying the equivalent of 13,200 20-foot shipping containers, or TEUs, to transit the passage, Zubieta said, creating a more cost-efficient route between Asia and the East Coast.
The S.C. State Ports Authority is pursuing a plan to deepen the Port of Charleston to 50 feet, from the current 45, but 2019 is the earliest that the Army Corps of Engineers thinks the work could be finished. Other ports are similarly working to deepen shipping lanes, or in some cases raise bridges.
“I believe we have the luxury of a little bit of time,” said Wolfgang Freese, president of Hapag-Lloyd America. “Fleets of 13,000-TEU ships are not suddenly going to arrive in April 2015.”
Freese said ports that want to be on an ocean carrier’s list will eventually have to offer sufficiently deep water for the big ships, around the clock.
The Port of Charleston is the deepest port between Norfolk and Miami and can handle large ships at high tide, but needs a deeper harbor for round-the-clock access. Michael Symonanis, with Louis Dreyfus Commodities, said larger ships could benefit the cotton export market, and bring more price stability. Other agricultural commodity exports on a panel at the trade conference agreed.
“These (big ships) are going to reduce Charleston’s cost, so we might be more likely to sail to Asia out of Charleston,” said Doug Grennan, senior manager for international markets with Scoular Co. “You should see more agricultural exports from the East Coast when the canal opens up.”
Scoular has found an export niche in shipping agricultural exports such as soybeans in shipping containers, rather than in bulk cargo ships. Containerized agricultural products are an export the Port of Charleston has been pursuing as a growth market.
“Will there be a shift in cargo to the U.S. East Coast? Of course there will,” said Robert Sappio, president and CEO of Rickmers Americas. “But, I think it will be more moderate.”
Reach David Slade at 937-5552 or Twitter @DSladeNews.