The deployment of more post-Panamax container ships, the expansion of the Panama Canal, and scarce federal resources for deepening projects make it absolutely essential that our nation produces sound decisions for modernizing our seaports.
Global logistics is a cost game, and ocean carriers are turning in droves to bigger ships in an effort to reduce per unit costs. Nearly 80 percent of the container ship capacity on order is on ships too large for the existing Panama Canal, and 8,000+ TEU ships are already deployed on weekly services to our coast.
These vessels have a draft of about 48 feet when optimally loaded, which translates into a channel requirement of 50-plus feet to handle such ships without restriction. Expanding exports – which are denser and heavier than imports – adds another element. This further exacerbates the deadweight dilemma for shipping lines and the harbor depth issue for ports as exports push ships down farther. It is apparent next-generation channels are essential to realizing the benefits and economies of scale that come with bigger ships.
Although the need for channel improvements is painfully obvious, it is complicated by two harsh realities: the federal budget situation and the end of earmarks as a means to fund deepening projects. These factors combine to create a clear demand for a national port strategy and the establishment of funding priorities based on economics, not politics. Deepening projects should be viewed no differently from investment decisions in the private sector, which faces limited funds and rationalizes capital budgets.
Projects should be prioritized on rigorous cost-benefit criteria that take into account the most benefit for the least cost, the most expedient timeframe, and the most environmental compatibility for our nation.