The Panama Canal is set to add a third lane capable of accommodating larger, modern vessels. Tests are scheduled for early 2014 with the floodgates projected to open for shipping in October, 2014. The cost of the operation is estimated around $3.2 billion and steel is already being formed into gates in Italy. The expansion will open new shipping lanes to and from East Coast Ports and is being called an engineering milestone.
But the United States is not ready. The most important benefit of the new canal will be its ability to accommodate much larger ships which will have up to 50 feet of clearance under the water. At this point, most US ports are too shallow to take advantage. President Obama issued an executive order to hasten dredging operations -- even going so far as to waive provisions of Endangered Species, Clean Air and Clean Water Acts to get it done. So far it has been all talk and the best estimate is that Eastern and Gulf Ports will be ready by 2020 at the soonest. That gives export competitors a six year head start.
The competition is ready. Brazil has already broken ground on a new superport in Rio de Janeiro and expects to have it completed by the time the new channel opens. Brazil is the home of the world’s largest iron ore producer and with easier access to Asian shipping lanes and rising ore inventories, Brazil is in good position to service China and other Asian markets.
Colombian coal is some of the cleanest burning in the world and its low sulfur content is very attractive to Chinese and Japanese energy producers. Natural Gas from Trinidad and Tobago will also find new markets in Chile, Argentina and Japan.
While the US is mired in environmental impact studies and bureaucratic preponderance, South America is poised to take full advantage of this new shipping avenue.
