August 23, 2014
Panama Canal

Panama Canal

Photo: AP

Port Miami

A dredging project will deepen Port Miami from 42 feet to between 50 and 52 feet. 

Photo: Port Miami

Port Everglades

Port Everglades plans to get to 50 feet deep over time.

Photo: Port Everglades

Port Miami Tunnel

The Port Miami tunnel will provide direct access between the seaport and highways I-395 and I-95.

Photo: Port Miami

International Trade - Ports

Panama Canal Expansion: A Game Changer?

Here's what you need to know when you cut through the hype about the expanding of the Panama Canal.

Mike Vogel | 12/4/2012

Florida is that rare state with a trade surplus; thanks largely to south Florida, it exports more than it imports. Florida’s 15 deep-water ports plan to spend $2.6 billion over five years deepening their channels, adding cranes, dockside rail and other infrastructure to better position themselves to capture the cargo traffic and the good-paying jobs that trade generates. Part of the building boom is focused on giant ships that will begin transiting a wider Panama Canal in 2015. Other spending aims to capture trickle-down traffic that feeds from those larger ships or that’s displaced by them. The goal: Attracting cargo that now goes through Long Beach, Calif., Savannah, Ga., or other ports.

 

» Takeaway No. 1
The wider canal isn’t the only logistical factor in determining Florida’s competitive position.

Florida Ports Council President Doug Wheeler points out that Florida is a two-day logistical ride (trains and trucks) to 60% of the U.S. consumer base. That argues in favor of Florida ports, but logistics is a complicated business — cargo ship lines have to analyze how to deploy their fleets; shippers must consider rail and truck rates and balance speed, service and diversification of routes.

Ports must crunch all the numbers to make their case as the best route. “The wider canal is tipping the playing field,” says Paul DeMariano, a consultant and former director of Port Everglades. But “you’ve got to know something more than ‘build it and they will come.’ ”

Ken Roberts, CEO of WorldCity, a Coral Gables company that follows global business, says “shipping lines and logistics companies are pretty agnostic. They want the most efficient and least expensive means to get the goods from beginning to end. It remains to be seen how well the state can do that. There will be all sorts of calculations the shipping lines will have to make.”

 

» Takeaway No. 2
Miami sees itself as most likely to benefit from an expanded Panama Canal.

When the wider canal opens in 2015, only three ports on the east coast will have the 50-foot channel depth needed to accommodate the new generation of monster ships that can carry 12,500 cargo containers: Norfolk, Va., New York and PortMiami. Gov. Rick Scott, who is very popular in port circles, saw to it that Miami got the funding necessary to deepen its channel.

Within 18 months, PortMiami will have both the deep water and a tunnel connecting the port to the interstate. “Florida’s the center for the hemisphere,” says PortMiami Director Bill Johnson. “Miami will be it. Miami will be at 50 feet. That has raised the conversation. It has raised the bar. ... You’re either in the game or you’re not. Here in Miami, we’re in the game. … Under the leadership of Gov. Rick Scott and the Florida Legislature, Florida has the opportunity to propel itself from the fourth position (in exporting states) to be No. 1 in America.”

 

» Takeaway No. 3
The Panama Canal isn’t the only high-impact trade factor.

Both JaxPort and Port Everglades plan to get to 50 feet eventually to accommodate the super cargo carriers. That said, “the Panama Canal is — I’m not going to say it’s not a significant project; it is — but whether it’s a game changer is debatable. Is it the game-changing project that people thought it was even five or six years ago? I think not,” says Paul Anderson, CEO of JaxPort. “The Suez Canal will be in my opinion the opportunity to be the game changer for the east coast of the United States.”

Anderson argues that as rising Chinese costs drive manufacturing to Southeast Asia and India, a route through the Suez will be attractive for reaching the east coast. JaxPort already has Suez-transited cargo ships calling weekly that are bigger than anything the Panama Canal can handle until it finishes its widening project in 2015. However, such ships can’t come in fully loaded because there’s not enough depth in the port’s waterway.

Tags: International Trade

Digital Access

DIRECT DIGITAL ACCESS
Add digital to your current subscription, purchase a single ditgital issue, or start a new subscription to Florida Trend.

TABLE OF CONTENTS
An overview of the features and articles in this month's issue of Florida Trend.

ACCESS THIS ISSUE »

Florida Business News

Florida Trend Video Pick

How to Do Florida: Crabbing on Tampa Bay
How to Do Florida: Crabbing on Tampa Bay

How to Do Florida host Chad Crawford joins Tampa Bay legend Gus Muench, of Gus' Crabby Adventures based in Ruskin, for a day's work hauling traps and then a rewarding crab dinner.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

After meeting with climate scientists, what should Gov. Scott's next move be?

  • Take action: He should adopt recommendations and move quickly to avoid greater disaster and economic problems.
  • Remain neutral but at least make a statement addressing concerns.
  • Take no action. Gov. Scott has more important, more immediate matters to attend to.

See Results

Ballot Box
Subscribe