A report released by Moody’s Investor Service has stated that big changes in cargo from the US West Coast (USWC) to the US East Coast (USEC) as a total result for the completion of this Panama Canal expansion in 2016 are unlikely.
Neil Davidson, Senior Port and Terminal Analyst at Drewry recently said that more container lines have already been utilizing the USEC route via the Suez Canal as result of more capacity along this trade lane.
There is the issue of this current return of strike-action during the ports of Los Angeles and Long Beach, which could potentially rekindle congestion that is huge in container movements being diverted to ports across the USEC that can handle this new period of mega-ships.
Myra Shankin, Analyst and Report Author at Moody’s, said: "In most cases, shipments from Asia to USWC ports will arrive at inland destinations faster than via a route that is all-water the East Coast through the Panama Canal.
“Additionally, ports' long-lasting contracts contain minimum yearly guarantees, which will protect the USWC ports from swings in cargo amount and revenues. Nonetheless, on-going labour and operational difficulties at USWC ports could move cargo traffic if not settled."
Economic benefits could be obtained by local governments that are situated closely to USEC. Those gaining will be ports with water depths deep sufficient to accommodate the bigger ships along with the intermodal transportation connections that are best.
Coby Kutcher, Report Author and Analyst at Moody's, said: "Even an uptick that is muted cargo volume from Panama Canal activity will provide at the least some increased revenue for local governments. Notable municipal 'winners' is going to be in the Norfolk, Virginia and Savannah, Georgia regions.”