There is very exciting news this week about completed or announced transportation building projects in several jurisdictions globally. The Port of Prince Rupert, in northern British Columbia, and the newly-expanded Panama Canal have both finished extensive expansion projects. As well, China is planning major new railway lines internally and elsewhere.
On May 19 was held a ceremony on Ridley Island in BC to mark the completion of the Road, Rail, and Utility Corridor serving the Port of Prince Rupert. In attendance were representatives from the Prince Rupert Port Authority, the federal and provincial governments, CN Rail, and Canpotex, all of who contributed to the $97 million needed to surround the island with five parallel rail tracks, a two-lane road and a power distribution system.
The corridor was constructed over the past two years and supports multiple new large-scale terminal developments that officials anticipate will boost Canada’s trade capacity with Asia-Pacific markets, authority officials said in a press release.
Prince Rupert experienced a growth of 13.8 per cent in the number of loaded containers being handled, a number that just beats out the 11.23 per cent growth experienced by the Port of Mazanillo in Mexico and the 11.2 per cent growth experienced by Boston, MA. However, the growth experienced in Prince Rupert is well above the 2.5 per cent growth experienced by all North American terminals and significantly higher than the 1.6 per cent growth seen across all Canadian terminals.
The Journal of Commerce has released its list of the fastest growing container ports in North America and Prince Rupert’s Fairview Terminal sits at the top of the list of 25.
This shared-use infrastructure defines a long-term port development plan for Canadian export terminals that will provide the capacity to ship potash, liquefied natural gas, and other Canadian products to international markets.
When outbound cargo and import cargo are considered independently, the terminal in Prince Rupert more than bucks the national trend. Figures from the Prince Rupert Port Authority show export growth at 3.4 per cent for 2014 compared to an overall 5.2 per cent drop in exports from all Canadian terminals while import tonnage grew 18.9 per cent compared to an overall seven per cent increase across Canadian terminals.
Further south, a crowd assembled on April 28 to see the last, most impressive piece of the new and improved Panama Canal being literally slotted into place. A massive sea gate standing eleven stories tall moved on its own down the great concrete sluice that Caterpillars and Putzmeisters carved from the jungle. Construction workers snapped selfies as the 9 million-lb. (4 million kg) gate pivoted into its slot.
The US$5.25 billion expansion is projected to double the canal’s capacity.
Railways, Ports, Canals
The vessels the Panama Canal was first built to accommodate were 106 ft. (32 m) abeam, a width that dictated the maximum for oceangoing ships known as Panamax. But after accepting control of the canal from the US in 2000, Panamanian officials surveyed shipbuilders’ intentions and glimpsed a future that spelled the canal’s obsolescence. A ship 106 ft. wide and 965 ft. (294 m) long can carry perhaps 5,000 containers. However, widen the beam to 160 ft. (49 m) and the length to 1,200 ft. (366 m)–the size of a ship that can fit in the new channel–and the container count rises to 13,000.
The ability to send Capesize ships up to 180,000 dwt through the expanded canal would “enable transportation cost saving and may lead to alternative routing for US exports of some bulk commodities such as grain, petroleum, and coal to Asia,” the US Maritime Administration asserted in a 2013 report.
Although only 12 to 14 additional vessels per day can be accommodated through the new locks, the increased size of the vessels will result in doubling Panama Canal throughput from 300 million Panama Canal/Universal Measurement System (PC/UMS) tonnes to 600 million PC/UMS tonnes, according to MarAd.
Jorge Quijano, CEO of the Panama Canal Authority, told the Financial Times Wednesday he expects growing US energy and grain exports to help increase traffic on the 100-year-old canal, validating the expansion, which will be completed in April next year.
The upgraded Panama Canal will be able to handle ships of up to 14,000 Twenty-foot Equivalent Units (TEU) although with 19,000 TEU ships already in operation worldwide, he confirmed that discussions are underway about further expansion.
Container ships account for a quarter of all trips through the canal and almost half of collected tolls while the US economy is responsible for more than two-thirds of the canal’s business.
In the 2014 fiscal year, 2,891 container ships transited the canal carrying 11.6m TEU, down from pre-financial crisis highs of 3,600 vessels carrying 12.6m TEU in the year to September 2007.
The expanded Canal will be great for Houston and other US southern ports.
Indeed, the US Army Corps of Engineers is once again weighing the costs and benefits of a potential US$300 million effort to deepen the lower Mississippi River by as much as five feet.
The New Orleans Advocate reports (http://bit.ly/1HIlKWs) the project — which would cover the stretch from Baton Rouge to the Gulf of Mexico — is being considered largely in light of the work underway at the Panama Canal.
When the Panama project is finished, the canal will be able to accommodate ships with drafts as deep as 50 feet below the water’s surface. That is 5 feet deeper than what’s available on the lower Mississippi.
The states of Florida, Georgia, and South Carolina have been making investments in their ports to handle expected new traffic.
Elsewhere, the Suez Canal, which has connected the Mediterranean to the seas of Asia since 1869, is adding lanes to accommodate two-way traffic on much of its 120 miles (193 km) through Egypt. Turkey has plans to dig a canal parallel to the Bosporus Strait linking the Black Sea and the Mediterranean. And China is planning to spend up to US$70 billion on an entirely new canal across Nicaragua, the route the US championed before bisecting Panama.
In contrast, at the inaugural Global Port Research Alliance conference, terminal operators and logistics industry executives in Hong Kong earlier this month threw up their hands in frustration at the lack of government response to the critical issues facing Hong Kong’s container port. Port congestion, complexity from bigger ships and alliances and, most importantly, a steadily falling throughput continue to plague operators.
Last year the port suffered chronic port congestion as large new shipping alliances discharged and loaded greater volumes, requiring thousands of inter-terminal truck moves to reposition the boxes. That situation hasn’t changed and the peak season this year is expected to again see port delays as bigger ships are taking up more berth space, and huge growth in barge services adds to the traffic.
The lack of back-up land in the Kwai Tsing container terminals has long been one of the critical issues facing Hong Kong and the city’s Secretary for Transport and Housing Anthony Cheung made a brief mention of it in his enthusiastic portrait of Hong Kong as the world’s greatest logistics hub.
Still in China, the country is considering a trans Amazon railway proposal with Peru and Brazil, as well as looking at investing in Lithuania’s port of Klaipeda on the Baltic Sea. That port will give sea access to landlocked neighbour Belarus where China Merchants is investing US$5 billion in an industrial park, according to Journal of Commerce Thursday.
Klaipeda is the biggest container port on the Baltic Sea, handling 127,382 TEU during 1Q 2015. Despite that figure being a 13 per cent decline compared to 1Q of last year, it was enough to keep the port ahead of the second-placed Latvian port of Riga. Last year, container traffic in Klaipeda increased by 11.8 per cent to 450,400 TEU.
The China-Europe rail links along the New Silk Road can connect with Klaipeda, opening up the Scandinavian countries and providing transshipment services to central and western European countries.