The $5.25 billion expansion of the Panama Canal, eagerly awaited at the port of Savannah, is now expected to be completed by late June — two years later than planned.
The wait, though, should be worth it for Georgia’s economy, according to Curtis Spencer, a logistics and shipping expert.
“It took a long, long time to get to where we are today,” Spencer, president of Houston-based IMS Worldwide, told 1,700 attendees at the annual Georgia Logistics Summit in downtown Atlanta. “It’s going to open this year.”
The Panama Canal Authority announced recently that the ceremonial opening of the new locks is scheduled for June 26. It remains to be seen, though, whether quicker all-water access to and from Asia will boost business at Savannah — the nation’s fourth busiesst container port — and other East Coast ports.
What is certain, though, is that a deeper and wider Panama Canal will allow bigger ships, carrying more cargo, to travel from China and other Asian manufacturing hubs to the East Coast. Currently, most ships calling on the East Coast carry about 5,000 filled containers. The expanded canal will allow ships with capacities of up to 14,000 containers.
The canal’s delay redounds, actually, to Georgia’s benefit. The state and the Georgia Ports Authority are in the midst of a $706 million deepening of the Savannah River to allow bigger ships to steam 40 miles upriver from the Atlantic Ocean to the port of Savannah.
Deepening the river, from 42 feet to 47 feet, is expected to be finished by 2020. While state taxpayers have fulfilled their $266 million share of the project, port backers await Congress to make good on the rest of the money.
“We anticipate growing capacity and project FY2017 container growth through Savannah to be in the four to five percent range,” said Curtis Foltz, executive director of the port authority.
Foltz, though, underscored that the mega-ships won’t immediately hit the East Coast. Shippers and logistics experts expect a gradual increase in big ships traversing the canal. With the ability to handle ships carrying three times as many containers, shipping costs should drop.
Spencer, the logistician, said a container from China landing on the East Coast costs $2,000 more than a container dropped on the West Coast and put on a train to Atlanta, Charlotte or other eastern destinations. Shipping rates, though, are dropping.
“The dollars are significant,” Spencer said. “I see this as a gamechanger pretty soon.”
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