Expanded Panama Canal – How Will That Affect International Commerce and US Distribution?

Well, I am sure Warren Buffet has a strategy in mind to ensure that his railroad can handle the changes occurring in global trade distribution, namely the opening of the Northwest Passage for shipping and the expansion of the Panama Canal able to take mega-ship cargo container vessels. Still, I don’t believe that most people really understand how things are about to change drastically, or maybe they do, but have resorted to burying their heads in the sand. Take the Longshoreman Union for instance, talk about a future redistribution in labor as port shipment loads change. Let’s talk shall we?On the Gulf Coast and East Coast port cities are gearing up to take bigger ships and have floated billions in new bonds to expand because the Panama Canal is going to change everything. In the Journal of Commerce on April 5, 2013 there was an article titled; “US Senate to Study Impact of Panama Canal Expansion,” by JOC Staff which noted;”US Senate Committee on Commerce, Science & Transportation is holding a hearing titled; “Expanding the Panama Canal: What Does It Mean for American Freight and Infrastructure?” The hearing will explore how the Panama Canal expansion will change the movement of freight into & throughout the US & explore the public & private infrastructure investment needed to meet these changing freight patterns.”No longer will West Coast ports be able to hold shipping companies for ransom with high costs. Ports with expensive labor unions calling the shots will end up shooting themselves in the foot, and the ports will lose billions in fees, unbelievable numbers of jobs, and those local economies will feel the brunt as well. Piggy back rail car service will be affected, so too will shippers of automobiles and large long-haul truckers. Some might say this is a good thing. I concur to some degree, efficiency should always be favored. Of course those losing their jobs won’t be too happy.Many shippers have felt taken advantage of, paying higher costs, even after the mega-bulk shipping advantage of carrying 15,000 plus containers per crossing. Now the tables are turned, and they have the advantage and ports must compete for traffic. This means the entire distribution network and supply chain will evolve to match this new paradigm, and as always there will be winners and losers in the free-market because of all this. North America is a large continent, and now there are several more potential routes to get good and services in, and to export them out to our global trading partners.Whereas, there have been endless delays on the expansion of the Panama Canal, all that recent history matters not once it is in full swing and as other ports around the US expand to accept the larger ships through increased dredging and enlarging of facilities. The third set of locks will open in 2015 and double capacity through the Panama Canal choke point.This will help US exporters getting their products to foreign markets cheaper, but it also lowers the import costs of those bring products in. How companies use all these new factors to their advantage will determine which ones excel and which ones fail. Please consider all this and think on it.