Panama Canal Expansion Could Boost Hampton Roads and Virginia Economy

Sunrise over Hampton Roads harbor - port facilities are across the harbor from our street

Despite the efforts of the Republican Party of Virginia backwards and unwelcoming to anyone who is not white, heterosexual and conservative Christian, the Hampton Roads region and to a lesser extent other parts of the state could nonetheless receive a huge economic boost next year when the expansion of the Panama Canal is completed and the superior aspects of Hampton Roads harbor could make the area the premier container ship port on the East Coast. If the projected economic boost occurs, one can only hope that it will also work to make the area more progressive - many of the European shipping lines are based in countries far more socially progressive - and boost the population and help the GOP's base in rural Virginia to be forever out voted by the urban areas of Virginia.  The Richmond Times Dispatch looks at the prospects for Hampton Roads:

The Port of Virginia — and the state’s economy — should be able to benefit from the expansion of the Panama Canal, due to go into operation at the end of 2015, Panama Canal and Virginia Port Authority officials said Friday.

“Virginia’s port has the draft and capacity,” María Eugenia Sánchez with the Panama Canal Authority said at the Governor’s Conference on Agricultural Trade. “They are in very good condition.”

The canal’s expansion “is going to be beneficial to us,” said Thomas D. Capozzi, the Virginia Port Authority’s chief commercial officer. “It really plays to our advantages — deep water and rail connections.”

The century-old canal’s $5.25 billion expansion now under construction is expected to create demand for ports to handle the new Panamax ships, vessels the maximum size the canal can accommodate.

Now limited to 5,000-container vessels, the Panama Canal will be able to handle ships carrying 13,000 containers when the expansion goes into service in 2015, Capozzi said.

“That will make the East Coast more competitive vis-à-vis the West Coast” for ships carrying cargo from Asia, he said.

At 50 feet, Hampton Roads has the deepest shipping channels on the East Coast, capable of accommodating vessels carrying 10,000-plus containers, the authority said.

A port like Hampton Roads, which is deep enough and well-enough equipped with commercial transportation infrastructure to handle the supersized ships, could be a big winner.

 More than 30 international steamship lines service the Hampton Roads port, and the Norfolk Southern and CSX railroads offer on-dock, double-stack intermodal service to major markets in the Midwest and the Southeast, the authority said.

The expansion project entails building two new sets of locks, one on the Pacific side and one on the Atlantic side, as well as widening and deepening the navigational channels in Gatun Lake and Culebra Cut, an artificial valley that was cut through the continental divide and that forms part of the canal.

The expansion of the Canal touches a personal note - my mother's father worked on building the original canal and received a commendation from then president Theodore Roosevelt (see image below).   It's where he first became involved in medicine and eared the funds to put himself through medical school.  After World War I - he ironically was stationed in Hampton, Virginia for the duration of the war - he returned to Central America and practiced medicine for roughly 20 years.

Roosevelt in Panama at the construction of the original canal

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.