But you need to start with the port and the port has to be ready. You need to plan for what will happen in the next 20 years. Were in a globalized world, said Alberto Alemán, the former chief executive of the Panama Canal Authority. These ships are not going to be waiting for anyone.
Savannah, where a steady stream of trucks carrying everything from frozen chicken destined for China to imported furniture and air conditioners arrives and departs, is a port that has long prided itself on responding to the changing world of global trade.
In 1945, the main port moved 12 miles up the river from its historic location when the state purchased a large tract of land that included an old cotton plantation. The move gave the port plenty of room to develop into a 1,200-acre container terminal with rail yards for CSX and Norfolk Southern, scores of refrigerated racks to hold containers, and more than 100 cranes that work both the wharves and the yards. By next year it will have 16 of the massive cranes needed for servicing post-Panamax ships.
More than 40 million square feet of distribution centers for companies such as Kohls, Home Depot, Wal-Mart Stores, Target, IKEA and other top retailers have been carved out of the piney woods that surround the port, which has played an active role in recruiting them.
Already truckers can get in seven to 10 trips a day but the port is expected to become even more efficient when a connector that will take I-95 directly into the port is completed in 2014, rail capacity is expanded and other improvements are made.
Savannah was a big beneficiary when a strike closed down the ports of Long Beach and Los Angeles for 10 days in 2002, prompting big shippers to experiment with all-water service to the East Coast.
West Coast ports such as Los Angeles and Long Beach, the two busiest container ports in the United States, have become the major gateways for U.S.-Asia trade. By using rail and truck links, they can get cargo to the East Cost faster than ships that use an all-water route to ports such as Savannah or Miami.
Weve never looked at the expansion of the canal as a way to move cargo faster, said Rodolfo Sabonge, vice president of market research and analysis for the Panama Canal Authority. Its a way to move cargo cheaply or more reliably. The larger ships are less expensive to move per unit of cargo.
Shipping products via the Panama Canal on a post-Panamax ship could represent a savings of 25 to 30 percent.
But experts say the West Coast ports will still be favored for high-value cargos and time-sensitive shipments, such as plasma TVs that must reach stores in time for Black Friday sales. The canals sweet spot will be handling lower cost shipments where margins are important but delivery times are more flexible, Sabonge said.
The West Coast attitude is the ports arent ignoring [the canal expansion] but theyre much more convinced it wont be such a big event, Gardner said.
Foltz agrees. Most of the shift in cargo from the West Coast has already occurred, he said, and Savannah doesnt expect to pick up much more West Coast cargo after the expansion.
But the port does expect continued growth. Currently, it handles three million, 20-foot containers annually and expects to more than double that when the port is fully built.
Even with the hefty $652 million cost of dredging, theres a tremendous cost/benefit ratio, Foltz said. The Army Corps of Engineers calculates that every dollar spent on the project will return $5.50 in economic benefits to the nation. Already the port supports 352,000 full- and part-time jobs across Georgia, Foltz said.
Despite competition among U.S. ports, how the race for deep water plays itself out isnt a major concern for Panama as long as there are some U.S. ports that are ready.
Five or six major ports could be plenty, said Sabonge, of the Panama Canal Authority. We just want to bring a new and improved canal to market. Its just a business proposition.