Because it is that good: “Shipping experts doubt Panama Canal expansion will bring the traffic, jobs being touted”

Yes I said 99% of the national financial media were sold out corporate whores but that does not mean there isn’t high quality business journalism happening folks.  The trick is knowing where to look and today, as is often the case, it is on the front page of the local paper.  Today Geoff Pender and Anita Lee examine the economics behind the Panama Canal expansion that includes a looksie at the shipping industry and the competition that ranks at the top of all the business stories I’ve read so far in 2012. The main reason for my enthusiasm is this piece has implications for every existing eastern port expanding in anticipation of the Panama Canal widening.

This snippet blows the political pump of these east coast harbor projects out of the water:

Daniel Yi, a spokesman for the port of Long Beach, Calif., notes shippers and rail services have invested billions in recent years in and around his port, one of the largest in the world.

“We don’t expect (canal expansion) to be a huge game changer,” Yi said. “…We just signed a $4.6 billion, 40-year lease with OOCL, one of the oldest Hong Kong-based shippers. I don’t think a carrier would have made a commitment like that if those guys saw a big change coming.”

John Lanigan is chief marketing officer for rail freight hauler Burlington Northern Santa Fe, which ships from West Coast ports to the Midwest and Southeast. He said freight specifically for East Coast destinations “is already moving all water,” and his company is not expecting a significant diversion.

This what seasoned investors would term high quality “due diligence”:  Every talking point and assumption was examined critically and challenged.  The process is not unlike the scientific method, now rejected in states like Louisiana that have dismantled their public education system to further the political aspirations of the head narcissist in chief.

In any event, the money being used for the elevation project is excellent hazard mitigation and using any of it to dredge the channel is as misguided as location freezers stuffed full of chicken and pork bellies at sea level before Katrina.  We pay a terrible price environmentally for that channel and I think it may be time Slabbed explores that, especially in light of what I saw on my last trip to Ship Island, which appears to be literally eroding into the channel to my untrained eye.

sop

5 thoughts on “Because it is that good: “Shipping experts doubt Panama Canal expansion will bring the traffic, jobs being touted””

  1. Well the Longbeach rep. would be expected to talk their book. But it is good to hear both sides of the story. Longbeach has had a lot of problems in the past, and the shippers would be expected to spread the eggs around alternate baskets.

  2. We need to remember that it was California dock workers and BNSF who spent a ton of cash, and used a fake ranchers, on their campaign to have TTC (Trans Texas Corridor) stopped along with the proposed super container port at Brownsville.

    West Coast and BNSF spokesfolks should not be treated as that credible. BNSF makes a ton off of mini landbridge services hauling containers between West Coast ports and Great Plains/Mississippi River Valley destinations.

    Also remember that Mobile and New Orleans are both where different railroad systems meet.

  3. More than half of the Asian freight into Long Beach stays on the West Coast which is a huge market. Then the rest is shipped into the interior. As this said, freight for the Northeast already goes there by water which is much cheaper than rail from a closer Western or Southern port.

    There is no good reason for a lot of Asian freight to come to Gulfport or Mobile or even New Orleans if that is not the final destination market. We have ports that were built around exports in a different era. New Orleans still has the bulk cargo freight export business but no one is begging to be able to bring in more inbound freight to these ports.

  4. Sop,

    I agree that the port should be raised to a reasonable elevation and better protected from surge but 25 feet is ridiculously expensive and questionable. The fine sand in the Sound won’t do for the port project so they would need to truck in tons and tons of more substantial material and pack it layer after layer at a time and then build heavy-duty port infrastructure on top of it. A lot of time and federal money.

    Then if you have a 25 foot port but the rest of Gulfport south of the CSX is 20 feet and lower the the port would be diverting and intensifying the surge into downtown. Similar to the MRGO levee’s effect on New Orleans East. That was why the MDA plan actually suggested elevating downtown Gulfport to 25 feet also, with a ludicrously low estimate of the costs and the feasibility.

    1. My mind isn’t completely closed though the memories of people wearing hazmat suits wandering around doing nothing while my wife and I finally got a chance to salvage some belongings in October 2005 picking through putrified/petrified chicken leg quarters and pork bellies is vivid to this day.

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