A report released by Moody’s Investor Service has stated that large changes in cargo from the US West Coast (USWC) to the US East Coast (USEC) as result associated with completion of this Panama Canal expansion in 2016 are unlikely.
Neil Davidson, Senior Port and Terminal Analyst at Drewry recently said that more container lines have been utilizing the USEC route via the Suez Canal as a total result of more capacity along this trade lane.
There is also the problem associated with recent return of strike-action during the ports of Los Angeles and Long Beach, which could potentially rekindle congestion that is huge in container movements being diverted to ports over the USEC that are designed for the latest era of mega-ships.
Myra Shankin, Analyst and Report Author at Moody’s, said: "In most cases, deliveries from Asia to USWC ports will arrive at inland destinations faster than via a route that is all-water the East Coast through the Panama Canal.
“Additionally, ports' long-lasting contracts contain minimum guarantees that are annual which will protect the USWC ports from swings in cargo volume and revenues. Nonetheless, on-going labour and operational difficulties at USWC ports could shift cargo traffic if not remedied."
Economic benefits can be obtained by local governments that are situated closely to USEC. Those gaining will be ports with water depths deep sufficient to allow for the more expensive ships and with the best intermodal transport connections.
Coby Kutcher, Report Author and Analyst at Moody's, said: "Even an uptick that is muted cargo volume from Panama Canal activity will provide at the least some increased revenue for local governments. Notable municipal 'winners' are in the Norfolk, Virginia and Savannah, Georgia regions.”