Is U.S. Infrastructure Ready for Post-Panamax?

With the long-anticipated expansion of the Panama Canal now nearly complete, logistics operations up and down the East Coast of the U.S. are getting closer to seeing a game-changing event become reality.

The re-opening of the expanded Panama Canal in early 2016 could increase business at many Northeastern ports on the East Coast to record-setting volumes. Recent research by The Boston Consulting Group and C.H. Robinson predicts that up to 10% of container traffic could shift to the East Coast following the expansion of the Canal by 2020.

While there’s little doubt that the shift of container traffic from China and East Asia will be reaching the shores along the East Coast, there is uncertainty as to whether the transportation infrastructure in the Northeast will be able to handle the increase in cargo demands.

Many ports have had the foresight to initiate infrastructure projects aimed at handling the larger post-Panamax ships. These include deepening the main channel of the Delaware River and raising the Bayonne Bridge in New Jersey.

According to a recent article in Food Logistics by Eric Sacharski, industry insiders aren’t worried so much about the ports handling the increased cargo as much as the crumbling highway system that is already incapable of transporting current levels of traffic.

“The northeast highway system is severely limited,” says John Haggerty, vice president of business development at Burris Logistics, a supply chain solutions provider. “Washington D.C., Philadelphia, New York and Boston are traffic nightmares, and the worst traffic in the entire US. may very well be in Fairfield Country, CT. The ports concern me much less than the highways.”

A deeper Panama Canal will give everyone along the East Coast a chance to seize more market share; unfortunately, the inadequate, broken highway system we have in place could hurt the region’s ability to compete.

Michael Landsburg, vice president of real estate at NFI Industries, another logistics provider, agrees. “As distribution gets closer to end markets and customers, traffic congestion and volume of trucks and cars on the roadway will continue to be a limiting factor,” he says.

Anxiety over whether our gridlocked highway system can handle the influx of post-Panamax goods is a clear example of what experts have been saying all along: Our highway infrastructure – and lack of a long-term funding bill – is limiting our ability to grow here in the U.S. and to compete internationally.

 

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