The Panama Canal Expansion
The Port of Houston and the Panama Canal both celebrated their 100th birthdays in 2014. And now just 2 years after passing their century mark, they are preparing for some monumental changes.
On June 26, 2016, a huge container ship made the inaugural passage through the recently expanded Panama Canal. Stewarded by tugboats, the Chinese-owned Cosco Shipping Panama entered the Cocoli locks near the capital carrying 9,000 cargo containers. (Compared to the canal’s previous limit of approximately 5,000 TEUs, the expanded Panama Canal with it larger locks can now accommodate vessels up to 14,000 TEUs.) This portends big things for imports from China to the US Gulf.
However, the Port of Houston faces challenges as its depth cannot accept the larger ships that will be able to go through the deepened and widened Panama Canal. And the freight that comes from Asia to Houston (as well as most of the interior of the United States) is handled well enough via The Ports of LA and Long Beach in California and thence overland by rail as it stands.
Additionally, the Panama canal expansion is drawing criticism from the industry because while it can now accommodate ships triple the size of the ships that can pass, its design is proving unsafe for larger ships. It may be better to have imports from China via the old route through Long Beach.
In the month since the Panama Canal expansion opened, there have been already three reported incidents of a ship hitting a wall on the new lane. The Chinese container ship, Xin Fei Zhou, has a sizeable gash after striking a lock wall which tore holes in its hull. The first tanker to pass through the new lane of the canal, the Lycaste Pece, had its fender ripped off in a collision earlier this June, resulting in damage to the railing of the ship. As it turns out, even the Cosco Shipping Panama, the very container ship that made the inaugural journey through the expanded canal also had a fender bender as it brushed against a canal wall.
Only time will tell whether the larger ships will work out as planned, but for the ones that can make it through the new Panama Canal, they also face challenges as this route doesn’t seem to offer substantial advantages over the present routing.