posted
It's been thought that the North American containerized freight rail business would be transformed by the opening of the new Panama Canal. The new canal locks are able to move larger ships which enables Asian shipping companies to bypass the west coast ports and use east coast and Gulf Coast ports that are closer to many of the major markets. By replacing the long, expensive cross-country train trip with a few more days at sea, shippers are hoping to save on total shipping costs. The New York Times, however, has published an article that raises questions about whether or not the new canal will be as successful as hoped.
quote: Seven years later, and nearly two years late, the locks have finally been declared ready to accept the new generation of giant ships that carry much of the world’s cargo but cannot fit in the original canal. To mark the occasion, Panama has invited 70 heads of state to watch on Sunday as a Chinese container ship becomes the first commercial vessel to attempt the passage from the Atlantic Ocean to the Pacific through the larger locks....
But when the speeches and the celebrations end, one inescapable fact will remain: The expanded canal’s future is cloudy at best, its safety, quality of construction and economic viability in doubt, an investigation by The New York Times has found.
The article chronicles a series of suspect decisions in the bidding process, project management, oversight and engineering work. The consortium that won the bid for the project underbid the other submissions by $1 billion and was forced to complete the project by cutting corners and working with bare minimum margins.
For an Amtrak rider, the new Canal might not have a huge impact. Perhaps fewer container trains might allow the east/west LD trains to achieve a better OTP or the Silver trains might be delayed more often if there's more container traffic on the eastern lines. But it is dismaying to see another "Big Dig"/mega-project achieving less, costing more and finishing later than originally planned. I wonder if any of the planned North American HSR systems will ever start service on-time and without a budget overrun.
Posts: 831 | From: Seattle | Registered: Jan 2011
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posted
At least one cruise line (Princess) is marketing transits through the new canal locks.
From what we saw and heard when we were in Panama a year ago and again in January, I'm not especially hopeful that this will be a smooth operation. We saw core samples of the new concrete (already showing deterioration) compared to the 100+ year old (still strong) and have since heard stories about the Spanish built tugs that will be used instead of the locomotives (mules) to maneuver and haul ships. Apparently they function best only in reverse...
The Panamanians went with the lowest bidder.
Frank in sunny and CLEAR SBA
Posts: 2160 | From: Santa Barbara, CA, USA | Registered: Oct 2003
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posted
Yes, the NY Times article mentions that the tugboats are being operated in reverse. Apparently the captains find they work best that way.
Also, the article mentions that the price for a Panamax ship to use the new Canal is $800,000 per trip. I think a shipper could buy a lot of rail service for that amount. I don't know what the tariff is for a cruise ship.
Posts: 831 | From: Seattle | Registered: Jan 2011
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Somehow the figure $350,000.00 sticks in my mind for our last transit on a Celebrity ship. That's one of the reasons why Panama Canal cruises are more expensive than the Caribbean cruises, for example.
I'm currently reading "Lawrence in Arabia" which I'd intended to read when we were transiting the Suez Canal. I wish I had. For me, that transit, even without the drama of the locks, was much more interesting and, yes, stirring. Much of the way we had "kids" along the banks waving AR's and hooting and hollering. Our convoy was lead by a US Navy Destroyer so we never felt threatened in spite of having undergone "Pirate Drill" a few days earlier as we sailed into the Red Sea.
Frank in dark and cool SBA
Posts: 2160 | From: Santa Barbara, CA, USA | Registered: Oct 2003
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posted
Vincent, I too devoured that investigative article appearing in Yesterday's Times. I'm sure it will be called "hatchet journalism paid for by the adversely affected parties - the West Coast ports and their lackey railroads".
But Gray Lady has weathered such attacks before; think Pentagon Papers - and it's for journalism such as this article why I have been reading her for now 65 years.
We should the article introduces a new term; Neo-PANAMAX.
Fingers X'd for Warren and Uncle Pete.
The Journal also recently ran a much shorter article (some will say more objective) regarding the Canal that contains interesting graphics:
The giant Panama Canal expansion opens June 26 amid much fanfare and one of the worst shipping industry slumps ever. While it won’t do anything to help the dire state of the industry near-term, the changes are critical to Western trade in the long run.
The canal, which handles about a third of Asia-to-Americas trade, had no choice but to expand. As the industry copes with its downturn, major shipping companies are pooling their resources and using fewer but much bigger ships—ones that are too large to fit through the pre-expansion Panama Canal
The Panama Canal can now accommodate vessels that are longer, wider and heavier than before, thanks to an expansion that was nine years in the making. The face-lift was crucial to compete in a world where ships are getting bigger and bigger. Illustration: Heather Seidel for The Wall Street Journal
The nine-year, $5.4 billion expansion more than doubles the canal’s cargo capacity. A third lane has been added to the canal that accommodates ships large enough to carry up to 14,000 containers, compared with around 5,000 currently. This alleviates a cargo bottleneck caused by the smaller ships that was due to get worse over time
disclaimer: author holds long position UNP
Posts: 9979 | From: Clarendon Hills, IL USA (BNSF Chicago Sub MP 18.71) | Registered: Apr 2002
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