Panama Canal Upgrade To Increase Traffic, But Is Houston Ready?

TexasBusiness.com


Texas Business reports:  GALVESTON—Shipping in the Houston-Galveston area is expected to increase tremendously with the expansion of the Panama Canal, but the region needs to be sure it is ready to meet the coming tidal wave of new business opportunities, saida Texas A&M University at Galveston professor.

Professor William Merrell, who specializes in coastal sustainability, says the $5.2 billion upgrade of the Panama Canal will have an international impact on the Texas gulf coast and the Houston Ship Channel and the ports of Galveston and Houston must work together to meet the increased new challenges.

“Everyone needs to be on the same page because it's a case of ready or not – the ships are coming,” Merrell said. “There is no doubt the Panama Canal upgrade will produce substantially increased shipping traffic in the Gulf of Mexico and the east coast. So the question is, are we ready for this?”

The Panama Canal is a 48-mile long channel that is a critical artery for goods coming in from Asia to the Gulf of Mexico and U.S. east coast. It was completed in 1914 and has not had any major improvements in its almost 100-year history, even though worldwide shipping has increased exponentially since it opened.

In 2008, construction began on a third lane of the canal and it is expected to increase traffic by as much as 50 percent when finished in early 2015.

The Houston Ship Channel was designed to carry ships at a maximum depth of 45 feet. But that may not be deep enough, Merrell says.

“The new bigger ships, what they now call Panamax ships, need at least a 50-foot depth,” he said. “These are ships that are over 1,200 feet long, and that's the way the shipping industry has been headed for the past 20 years or so. If dredging is necessary, it could take years to accommodate these big ships. Are we ready?”

The Port of Houston ranks first in the United States in international waterborne tonnage handled and is second in total cargo tonnage. It is the 10th largest port in the world. A 2012 economic impact study showed that more than 1.1 million jobs in Texas and nearly $179 billion of annual statewide economic activity were in some way related to cargo moving through the port.

Merrell says it may be necessary to have a deepwater channel closer to the mouth of Galveston Bay to allow the bigger ships better access to Houston and Galveston.

“That may or may not be feasible, but we at least have to determine what needs to be done,” he said. “Also, the expected increases in shipping will no doubt impact other areas, such as railroad lines and trucking routes, which are almost certainly going to feel the stress in upcoming years. There is the potential for thousands of jobs to be created by the time the canal project is finished in a few years. This is a critical time for this entire region, and we need to make sure Houston and Galveston work together as effectively as possible to make sure we take advantage of this wonderful opportunity heading our way.”