OCTOBER ISSUE: Expansion at U.S. Ports
- Sep 30, 2014
By Paul Rosta, Senior Editor
Sometime in 2016, one of the biggest public works projects of the age is expected to bear fruit when the newly expanded Panama Canal welcomes its first ships. Epic construction challenges, cost overruns and labor disputes have earned the $5.3 billion project considerable notoriety over the past decade. Beyond its more sensational aspects, however, industrial real estate stakeholders are weighing a complex issue: How will this watershed project affect the real estate strategies of end users nationwide?
“It is a big deal in the greater scheme of supply strategies,” explained Brandi Hanback, executive vice president for industrial development at the Rockefeller Group. Perhaps its biggest effect, she said, will be to enhance the flexibility of the supply chain. Linking the Atlantic and Pacific will permit a new generation of ships to transport cargo on an unprecedented scale. The original canal, which turned 100 this past summer, now accommodates vessels with a capacity of 5,000 10-foot equivalent units. Following the expansion, ships that can handle 13,000 TEUs will be able to pass through. The new supersize vessels are expected to start dominating shipping during the next couple of decades; by 2030, so-called post-Panamax vessels will convey 62 percent of seaborne traffic. The canal could also be instrumental in conveying increased trade volume from Asia, which will be the origin of 83 percent of waterborne imports to the U.S. by 2040, noted a report published in July by Cushman & Wakefield Inc.