IMPACT ON TRADE ON EXPANSION OF PANAMA

CANAL

OBJECTIVE AND NEED OF THE STUDY

• To know the trading pattern of countries directly linked by Panama Canal.

• To know the major changes in traffic flow from Panama Canal.

• To know how the expansion of Panama Canal will directly or indirectly affect the container, dry bulk and tanker trade.

Contd…

• To study the expansion program of US of its Panama Canal.

• To find out the answer of the question “Is it true that expansion of existing Panama Canal would prove to be a game changer for the container, dry bulk and Tanker trade?”

• How the Panama Canal can be used strategically by the USA?

RESEARCH METHODOLOGY

• The data collected is secondary data:- internet Library books Trade Journals Trade news from economic times

• The urls are as follows:-The Panama Canal Expansion: Potential impact on logistics and

supply chains, By Onesimo V. Sanchez, Office of market research and analysis, June 2012.

http://caribgrowth.competecaribbean.org/content/OnesimoSanchezKingstonpanamacanaljune2012_.pdf

Contd…

• Expansion of the Panama Canal Potential impact on Asia – East Coast/Golf trade, By Rodolfo Sabonge, Vice President, Marketing research and Analysis office, Panama Canal Authority

http://www.fhwa.dot.gov/planning/freight_planning/talking_freight/talkingfreight10_21_09rs.pdf

• The Panama Canal Expansion: Business as usual or Game changer?, By Dr. Jean-Paul Rodrigue, Hofstra University, New York, USA, & Dr. Theo Notteboom, President of ITMMA, University of Antwerp, Antwerp, Belgium

http://people.hofstra.edu/jean-paul_rodrigue/downloads/PT51-10_3.pdf

• Effects of the Panama Canal Expansion on Distribution Networks, By Fortna, www.fortna.com

http://www.fortna.com/whitepapers/Article_Viewpoint_PanamaCanalExpansion_FINAL_EN.pdf

RESEARCH DESIGN

• The design of the research is mentioned below:-

Conclusive research Descriptive research Explanatory research Quantitative research

Panama Canal Expansion Program Objectives

•Maintain Canal competitiveness as well as the value of the route

•Increase capacity and allow the transit of larger ships

•Reduce water consumption

•Improve safety and efficiency

•Sustain tonnage and profitability growth

Canal Expansion Program Components

•Deepening of Pacific and Atlantic entrance channels

•Deepening and widening of the Gatun Lake navigation channel

•Construction of new access channel for Pacific Locks

•Construction of new Post Panamax Locks and water saving basins in the Atlantic and the Pacific

•Increase the maximum operating level of Gatun Lake

Pacific Locks Site

Atlantic Locks Site

Benefits of the Panama CanalExpansion

• Largely decrease the instances of bottlenecks• Lower the average transit times by rendering

raised capacity• Allow for transit of Post Panamax vessels• Increase capacity to 42 vessel per day & by

2020 to 51 vessel perday• Average canal water time could be significantly

redused by using more robust tugs.

Main competitors of the Panama Canal route

Impact of the Panama Canal Expansion

The Panama Canal Authority Classifies its market into eight Segments

• Containers• Dry bulk vessels – grains, ore, coal• Vehicle Carriers• Liguid Bulk Vessels• Reefers or Refrigirated Transport• Cruise Ships• General Cargo Vessels• Micellaneous vessels – Navy, Barges, Dreges

General Cargo

CN

CSX

CSX Main Line & Yard

AGR/BNSF

Canadian National/KCS

Norfolk Southern

TASD Switch Yard

TASD Terminal Yard

Mobile Container Terminal

SteelHeavy Lift/Oversized

I-165 / I-65

I-10

Future ICTF

Mobile Ship Channel3.5 Hrs. to Sea Buoy

McDuffie Coal Terminal

Pinto Steel Terminal

CG RailwayService to Mexico

Pier 2 – Open Yard

NAFTA Gulf Bridgeto Mexico

Access to15,000 Mi.

Inland WaterwaysVia Tenn-Tom

50 5

0

Mobile Container Terminal

Intermodal Container Transfer Facility

50

2 Post-Panamax Cranes (4 More Planned)

2,000 Feet of Berth at 45 Foot DraftWeekly Carrier Service on Major Trade

Lanes (Maersk, CMA CGM, ZIM, HMM, APL)

Intermodal Container Transfer Facility

Future Rail Intermodal

Rail Intermodal Extends Port’s Reach into Midwest and Southeast U.S. Markets

Serves Domestic Shipments

Adjacent Land for Logistics

3-Year Development Plan

200,00 TEUs Throughput

Heavy Lift Crane

900T Crawler Crane

Secured to a 210’ x 68’ Barge Capable of Lifting 400 Tons

to the Center of a Panamax Vessel

Alabama Cruise Terminal

66,000 Sq. Ft. State-of-the-Art Terminal

Six Covered Drop Off/Pick Up Lanes

On-Site, 500 Space Parking Deck

Immediate Access to Interstate 10 and Interstate 65 (4 Miles via I-10)

Proven Drive Market

Entertainment, Museums, City Center Within Walking Distanced

New Marriott Rensaissance, Hilton and Holiday Inn Hotel Investments Within Walking Distance

Panama Canal Expansion

• $5.25 billion dollar project• Schedule for Completion in 2014• Panamax Vessels with up to 12,500 TEU• Will double the amount of goods• Impact on the gulf ports:

• Increase in incremental cargo• An additional Asian Service• Increase in feeder services from Transshipment

Hubs in the Caribbean

Shippers control supply-chain decisions that will influence the use

of the canal

• routing strategies will continue to be assessed based on:

• Fuel prices• Sourcing dessisions• Delivery times• Added value distribution centers• Intermodalism capabilities