Panama is already considering further expansion of its canal even before construction is completed on a third set of locks that will enable ships three-times the current maximum size to transit the narrow isthmus, President Ricardo Martinelli said in public comments after meeting with U.S. Vice President Joseph Biden in Panama City.
The wider set of locks will be capable of handling much larger container, tanker, vehicle, and bulk vessels, which maritime officials say will greatly increase their efficiency on the all-water route between Northwest Asia and the east coasts of North and South America. U.S. East Coast ports are vying for supremacy in the container trade, but few ports are dredged to the 50-foot depth required by fully loaded 14,000-TEU vessels for safe passage.
The Panama Canal Authority intends to complete the $5 billion project by mid-2015.
Martinelli said he and Biden discussed the possibility of a fourth set of locks to keep up with the changing dynamics of world commerce and maintain Panama's position as a multimodal hub.
Some shipping lines, for example, have placed orders for vessels with up to 22,000 TEUs of capacity and Nicaragua has made noise about building a canal from scratch that can handle larger vessels.
Martinelli and Biden said U.S. ports must prepare for the new generation of vessels to support economic growth.
"It is imperative and necessary that the ports on
the East Coast of the United States increase the dredging capability of their
ports and go to at least 50 feet depth in order to take advantage of the new
sizes of ships - the post-Panamax ships that will be able to transit the Panama
Canal with the expansion. This will bring
a number of benefits not only for Panama and for the world economy, but also for
the enormous amount of jobs and other opportunities that will be created in an
enormous number of ports in the United States," Martinelli said, according to a transcript posted on the White House Website.
"Modernizing the canal, Mr. President, is an investment in your future, but it
is also a consequential investment in the future of the United States of
America. It protects Panama’s unique place in the world economy as a new
generation of massive containerships and tankers hits the high seas. You're
moving from the ability to accommodate a ship that's 106 feet wide to a ship
that's 160 feet wide, doubling the commerce. And it’s of incredible consequence
to this global economy," Biden said.
Biden, who visited the Port of Houston's Bayport Container Terminal the day before, was accompanied by Transportation Secretary Anthony Foxx, Georgia Sen. Johnny Isakson and Atlanta Mayor Kasim Reed, Rep. Debbie Wasserman-Shultz of Florida, Baltimore Mayor Stephanie Rollins-Blake and Philadelphia Mayor Michael Nutter.
Isakson and Reed are supporters of the Port of Savannah, while Wasserman-Shultz represents Port Miami and Port Everglades in South Florida. Baltimore is one of two ports on the East Coast that currently has an unrestricted 50-foot channel. Shallower ports, like Philadelphia, might also add cargo volume if ocean carriers transship containers to smaller vessels at hubs in Panama, the Caribbean or the Gulf and East coasts.
By 2035, the number of containerized exports from Houston to Asia via the Panama Canal will increase five-fold from today, according to the Port of Houston Authority.
American manufacturers, farmers and longshoremen are eager for the opening of the expanded canal because it will help them get their products to market at less cost and create good-paying jobs, Biden said.
"People locate businesses and manufacturing facilities in places where they can
quickly, cheaply, and responsibly get their product to market. That only occurs
if there is serious infrastructure to accommodate what the world economy is
witnessing as a consequence of the canal being widened, because when goods
travel faster and cheaper, it increases commerce around the world," he said.
In addition to Houston, Biden in recent weeks has visited the ports of Baltimore, Savannah and Charleston, S.C., to beat the drums for Congress to invest more in port infrastructure, which the Obama administration views as a pillar of its economic growth strategy. The White House has taken steps to streamline the review projects for several major port improvement projects, but has not made any proposals on how to find additional revenue for harbor deepening projects.