planned expansion of the panama canal a brief discussion of the potential effects western dredging...
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Planned Expansion of the Panama Canala brief discussion of the potential effectsWestern Dredging Association, Eastern & Gulf Chapters2007 Fall Meeting, Oct 9-11, Philadelphia
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WHAT IS WIDENING THE PANAMA CANAL?
Construction of two lock facilities One on the Atlantic side {Gatun}, One on the Pacific side {Miraflores}, Each with three chambers and three water reutilization basins
Excavation of new access channels to the new locks, and Widening existing navigational channels, and
Deepening of the navigation channels along with The elevation of Gatun Lake’s maximum operating level”
“The third set of locks project is a plan to expand the Canal’s capacity composed of three integrated
components
3
MANY ROUTES FROM ASIA TO INLAND US
29
EXAMPLE: SOUTHEAST ASIA TO CHICAGO, IL
24 1
3
1
2
3
Alternate, competitive routes Various ocean services Western ports or via
canals Combined with inland
transportation connections Choices made based
on . . . Timeliness Rates, which are a
function of operating costs Inland connectivity Location of distribution
centers
4 1b
Regions colored with the predominant Port that directly supplies > 25% of the region’s Asian TEUs
Savannah
Norfolk
NY/NJ
Houston
Sea/Tac
Los Angeles
Oakland
Miami +
Charleston
CHI
ATLMEM
DFW
PIERS DATA INDICATE PORT HINTERLANDS
5
21
Net effect of 37% more container ship crossings and 25% more TEUs per crossing is approximately 71% more container capacity through the Panama Canal
• Overall Canal crossings are expected to increase from 34 to 41 per day (21% increase)
• Higher-value container crossings are expected to increase by 37% to approximately 9 per day
CONTAINER VESSEL CROSSINGS PER DAY CONTAINERS PER PANAMAX SHIP
• More TEUs (+25%) on the same number of closer-to Panamax vessels
• 75% of the ~4,800 TEU limit (3,570 TEUs) is a reasonable maximum0
1,000
2,000
3,000
4,000
5,000
2001 2003 201X
3,570
2,8582,450
Panamax Capacity 4,800 TEUs
75% of max.
capacity
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0CONTAINERS PER YEAR
mill
ion
TE
Us
2001 2003 201X
4,382,000
6,781,000
Reasonable Maximum w/o 3rd Set of Locks = 11.6MM TEUs/yr
2001 2003 201X
5.5
6.58.9
RecentImprovements
HISTORICAL DEMAND VS. MAXIMUM CAPACITY
0
2
4
6
8
10
4.9
6
ACP is responding to market Spurred by 2002 “lockout” Re-pricing of high value
freight Guaranteed crossing “slots”
Building infrastructure to increase capacity of existing locks New towing locomotives Updated lock hydraulics Gaillard Cut channel widening On-line reservations system Improved lighting
SIGNIFICANT PRE-WIDENING EXPANSION
7
OBJECTIVES OF WIDENING
Achieve long-term sustainability and growth for the Canal’s contributions to the National Treasury;
Maintain the Canal’s competitiveness, ensuring continued beneficial impacts on the economy and industries of Panama;
Enable the Canal to capture growing tonnage demand with appropriate levels of service for each market segment;
Make the Canal more productive, safe and efficient.
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CAPACITY TO SERVE A DIVERSE MARKET
New capacity utilized For highest-value freight
Other cargo too Higher value freight has
“pushed out” bulk cargo Coal and LNG projects
are waiting
New port developments Balboa, Cristobal, Colon Callao, Barranquilla,
Aguadulce, Cartagena
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3rd Channel will follow historical excavation effort 1939 dredging by United
States Alongside both Gatun
and Miraflores
Freshwater will be re-used Water Saving Basins
alongside each lock Proven technology
WIDENING WILL UTILIZE EXISTING OPPORTUNITIES
10
Current “Panamax” 294m LOA 12m Draft (from 11.5m) 32m Beam 4,500 TEUs max
Envisioned New Capacity 366m LOA 15m Draft (≈ 50 ft) 49m Beam 12,000 TEUs max
Panama Canal will not be the constraint to Asian => US shipping services Hence new projects at major ports (e.g., Hampton
Roads, NY/NJ) to keep up Savannah and Charleston deepening as well
ABILITY TO HANDLE THE ‘LARGEST’ SHIPS
11
PANAMA CANAL RATE INCREASE
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REDUCTION IN SHIPPING COSTS . . . AND RATES?
Ocean Shipping Costs Actual rates fluctuate Fully-allocated estimate
of North Asia => USEC $2,000 ~ $2,200/FEU
Based Upon Risk-adjusted return Ship capital cost Fuel, Crew, Tolls Excludes port
terminal and inland transportation costs
Larger ships will reduce costs per TEU Approx. 20% reduction if size increases from
4,500 TEU to 12,000 TEU capacity Your mileage may vary
-
0.2
0.4
0.6
0.8
1.0
1.2
4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000
Vessel Size TEUO
cean
Slo
t C
ost
Ind
ex
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PANAMA CANAL RATE INCREASE
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$400 WILL GET YOU ONLY SO FAR . . .
$300~$400 reduction in total costs via East/Gulf Coast Costs to West Coast ports
are unaffected So Least Cost Market Area
moves ≈100 miles west/north Ignores speed, service
West Coast port service to mini-landbridge intermodal has proven to very desirable
Largest growth will continue to be in the high population markets along coasts Mid-East markets (Columbus, Nashville) will
continue to be served via West Coast
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ILLUSTRATIVE EXAMPLE OF PORT GATEWAY SHIFT
PIT
ATLMEM
DFW
CLT
JCK
CMH
Currently, All Water service from (North & Southeast) Asia is primarily for delivery to locations near East and Gulf Coast
port gateways
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MODEST REDUCTION FOR ALL WATER SERVICES
PIT
ATLMEM
DFW
CLT
JCK
CMH
Currently, All Water service from (North & Southeast) Asia is primarily for delivery to locations near East and Gulf Coast
port gateways
With reductions in shipper costs for All Water service, some additional destinations may be served via East and Gulf Coast
port gateways
15
PANAMA CANAL RATE INCREASE
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BY ~2016, THE PANAMA CANAL WILL BE READY
50’ channels to allow the largest ships through
But will the East & Gulf Coast ports be able to receive them?
Thank you for your time & attention!