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Date: 2020-02-17 Page is: DBtxt001.php txt00011026

Transport Sector
Panama Canal

How the Panama Canal Expansion Is Redrawing the Logistics Map ... Following the Panama Canal expansion, up to 10 percent of container traffic to the U.S. from East Asia could shift to East Coast ports by 2020

Burgess COMMENTARY

Peter Burgess

How the Panama Canal Expansion Is Redrawing the Logistics Map

Following the Panama Canal expansion, up to 10 percent of container traffic to the U.S. from East Asia could shift to East Coast ports by 2020, however, West Coast ports will still…

How the Panama Canal Expansion Is Redrawing the Logistics Map View & Download Related Companies Boston Consulting Group C.H. Robinson Following the Panama Canal expansion, up to 10 percent of container traffic to the U.S. from East Asia could shift to East Coast ports by 2020, however, West Coast ports will still handle more traffic than they do today, but their market share will likely fall. By C.H. Robinson & The Boston Consulting Group 156 inShare December 25, 2015 The expansion of the Panama Canal will be the headline event in shipping in 2016. The $5 billion project promises to reorient the landscape of the logistics industry and alter the decision-making calculus of the shippers that the canal serves. According to research conducted jointly by The Boston Consulting Group and C.H. Robinson, as much as 10 percent of container traffic between East Asia and the U.S. could shift from West Coast ports to East Coast ports by the year 2020. Small percentages translate into big numbers in container traffic on highvolume lanes between East Asia and the U.S. This trade represents more than 40 percent of containers flowing into the U.S. Rerouting 10 percent of that volume, therefore, is equivalent to building a new port roughly double the size of the ports in Savannah and Charleston. This shift will have profound effects. The larger ports on the West Coast will experience lower growth rates, altering the competitive balance between West Coast ports and East Coast ports. (With global container flows rising, West Coast ports will still handle more containers than they do today.). It will also shape the investment and routing decisions of rail and truck carriers, magnify the trade-offs that shippers make between the cost and the speed of transportation, and potentially alter the location of distribution centers. West Coast ports currently receive two-thirds of container flows from East Asia, with much of that cargo moving by rail and truck as far east as the Ohio River Valley, about three-quarters of the way across the U.S. But once the big, efficient “post-Panamax”container ships begin passing through the wider, deeper canal, the shipping dynamics will change. For shipping to many destinations, using West Coast ports will still be the fastest option - but it won’t necessarily be the cheapest. For price-sensitive cargo that is relatively expensive to move, routing shipments through East Coast ports to inland destinations will become more cost competitive and increasingly attractive. In this report, we explain how shippers, carriers, and infrastructure operators (such as ports) need to respond to this shifting logistics environment, including: The Changing Logistical Landscape Growth rates for the larger ports on the West Coast will decrease, competition among East Coast ports will intensify, and rail and truck traffic patterns will shift. The Time Versus Cost Trade-Off The West Coast will always be the fastest option for reaching much of the U.S., but the East Coast will become the least costly option for many shippers. The Battleground The battleground on which U.S. ports compete for customers will move several hundred miles west, to a region that accounts for more than 15 percent of GDP. Urgency to Act The expansion underscores the need for shippers and carriers to adapt their strategies and operations in light of the growing complexity of the logistics field. Our review, we believe, is the most analytical public study of how the expansion of the Panama Canal will alter the logistics landscape of the U.S.


CHRobinson-BCG-Panama-Canal
'http://truevaluemetrics.org/DBpdfs/Transport/CHRobinson-BCG-Panama-Canal.pdf'
Open PDF ... CHRobinson-BCG-Panama-Canal


The text being discussed is available at
http://www.supplychain247.com/paper/how_the_panama_canal_expansion_is_redrawing_the_logistics_map
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