Sunday, January 13, 2013

Expanded Panama Canal - Will Virginia Be Ready for the Opportunity

The Panama Canal has always held a mystique in my family.   Why?  Because as a young man my mothers father worked on building the original canal which opened in 1914, received a presidential medal from Teddy Roosevelt for his services, and made the money while working on the canal needed to put himself through Vanderbilt's medical school.  Later, he would return to Central America as a doctor working both in Panama and Honduras.   Investments he made during the 1920's in Central American enterprises remain in the family to this day.   

The original Panama Canal revolutionized shipping and commerce.  Now, nearly a century later, the Panama Canal is being vastly expanded and trade will again be significantly changed, with east coast ports potentially hitting a major windfall - that is, if the ports are ready to take advantage of the opportunity.  Norfolk and Hampton Roads could enjoy an economic boom.  The question is, whether the area is equipped to take advantage of the opportunity.  We have the deep water port thanks to the U.S. Navy, but much of the rest of the needed infrastructure - especially improved highways - have stagnated and/or are in poor repair thanks to the Republican Party of Virginia's refusal to increase taxes to rebuild and expand critical highway systems.   Sadly, the knuckle draggers in the Virginia GOP cannot grasp the reality that to make money, sometimes you have to spend money.  A piece in the Washington Post looks at the coming game changer the expanded Canal will be.  Here are highlights:

PANAMA CITY — This is a story about big, and how one of the biggest construction projects in the world, the remaking of the Panama Canal, will let bigger boats sail into deeper harbors, where authorities are spending billions dredging channels, blasting tunnels and buying cranes from China the size of 14-story buildings to accommodate super-sized cargo.

All this might knock a couple of dollars off the price of a smartphone shipped from Shanghai — or alleviate poverty in Panama, where the government plans to make a fortune in tolls — or create a windfall for the ports ready to receive the big ships, such as those in Baltimore and Norfolk.

[W]ith the $5.25 billion expansion of the Panama Canal now officially half complete, a scramble is on among the hemisphere’s ports to lure a new generation of elephantine cargo ships, bulk carriers and automobile haulers to their harbors, where boosters envision an economic boom.
These new “post-Panamax” ships are the length of aircraft carriers. From the waterline, they’re 190 feet tall, or nearly twice the height of the Lincoln Memorial. The ships can carry as many as 12,000 containers, or about a million flat-screen TVs.

So important is the race to be ready for the more voluminous ships that the Port Authority of New York and New Jersey is spending $1 billion to raise the Bayonne Bridge to let the taller vessels pass through.

The ships are coming at a time when many experts say U.S. infrastructure — in ports, highways, bridges, railroads and tunnels — has suffered from delayed maintenance that has undermined U.S. competitiveness.

Ports in the Bahamas, Jamaica, Chile, Peru, Brazil, Colombia and the Dominican Republic are rushing to upgrade in hopes the ships will enter their harbors, too.

No place is the competition more fierce than in the United States. Three ports on the East Coast should be ready for the big boats: New York, Baltimore and Norfolk. Together, they hope to take a bite of the maritime trade passing through West Coast terminals, which handle the most U.S. imports from Asia.

[T]he new economies of scale and faster passage between the Americas and Asia will not only change maritime routes and cargo logistics, but also will create new markets to exploit the bigger ships and deeper ports.

We’ll see East Coast ports — and new sources in Colombia — shipping more coal to China. There will be iron ore from Brazil headed to Asia through the canal, and on and on,” Quijano said.

The United States completed the original 50 miles of Panama Canal in 1914. The expansion is being done by an international consortium of players and backers, with U.S. companies playing a secondary role.

[I]t is a very big deal, and there will be some winners and losers,” said Paul Bingham, an economist with the infrastructure consulting firm CDM Smith.  The impact of the canal may be felt far downstream. According to its June report to Congress, the Army Corps of Engineers foresees an increase in the bulk shipping of U.S. grain, fertilizer, oilseeds and petroleum, which could exploit competitive advantages provided by the improved canal, the U.S. inland waterways and post-Panamax ships.

Experts stress that the global shipping industry seeks a ruthless, penny-pinching efficiency, and routes and cargo flows will evolve.

So what is Virginia's GOP controlled government planning?  Perhaps selling the state's port facilities to private interests rather than properly fund them and sitting with their thumb up their ass rather than raise revenues to rebuild Hampton Roads' crumbling infrastructure.  As is the case in so many areas, the Virginia GOP is racing to take Virginia backward in time.  This November voters will have the opportunity to change this backward looking mindset.  They need to vote the GOP out of office in every office and district possible. 

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