The expanded Panama Canal adds to the challenges of Pacific Northwest ports — a stark contrast to the welcome that greeted the original when it opened a century ago.
When the Panama Canal opened in 1914, completing one of the grandest and toughest engineering feats in history, the ports of the Puget Sound looked forward to the debut with anticipation.
On Sunday, when the $5.25 billion expanded canal officially begins operations, the view from here ranges from caution to outright dread.
More than a century ago, the American-built marvel connected the Atlantic and Pacific oceans for a very different seaborne economy.
Europe, until being convulsed by the Great War that began the same month the canal opened, had been a major shipper of goods to the Americas. Germany and Britain, especially, were industrial powerhouses.
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But the United States had gone quickly from a developing nation to an economic giant in its own right. America had such a large and growing domestic market that it had little need to become a major exporter.
In other words, the Panama Canal of 1914 would bring westbound cargo to our ports and carry our raw materials back to Europe. The isthmus route was short enough to be competitive, in some cases, with transcontinental railroads.
No wonder West Coast ports were frantically preparing for increased shipping. One reason for the founding of the Port of Seattle in 1911 was to be ready to efficiently handle the crush of traffic expected from the new canal.
Now, much of the world’s cargo shipping moves in the other direction, especially from China to the United States. Not only that, but it does so in hyperefficient cargo containers aboard enormous ships.
The expanded canal can handle wider vessels. As a result, shippers will have the option to bypass the West Coast and sail straight to ports on the U.S. East and Gulf coasts, potentially saving time and money.
Bigger ships and less traffic on the West Coast could result in shipping lines deciding to make fewer calls, or none at all, at our Pacific ports.
Last year, 70 percent of Asian traffic came through West Coast ports, with containers transferred to trains and sent to the Midwest or Northeast. The wider canal has the potential to take a big bite out of that business.
Ports on the East Coast have been busy preparing, somewhat like Seattle and Tacoma a century ago. Miami; Savannah, Ga.; Charleston, S.C.; and the Port Authority of New York and New Jersey have been most aggressive in readying for the big new- (or neo-) Panamax container ships.
Maddeningly to leaders of the natural deep-water ports of Seattle and Tacoma, many of these new competitors have tapped the federal Harbor Maintenance Tax, collected on cargo here and elsewhere, to pay for dredging their ports.
Maritime officials here have been talking about the wider Panama Canal since work began in 2007. It was a big factor in bringing the historically warring ports of Seattle and Tacoma together in the Northwest Seaport Alliance.
One could say we’re as ready as we can be. But neither the world nor the canal are as they appeared in 2007.
China is at the heart of a great global slowdown, with profound consequences for a container-shipping industry badly mauled by the Great Recession.
Now about 18 percent of the globe’s container vessels are sitting idle. Worse, builders went on a spree that continued through the downturn, building ever-bigger ships.
The downturn has shaken the shipping companies. For example, last week the conglomerate that runs Maersk Line, the biggest container carrier by fleet size, said it was exploring options to break up. A.P. Moller-Maersk has the bad fortune to be in two ailing businesses, shipping and oil.
Meanwhile, although huge sums have been spent on ports, rail lines and warehouses back east, not everything is ready, including at the biggest port in the East.
New Panamax ships can’t get under the 83-year-old Bayonne Bridge to the largest New York/New Jersey terminals. The project to raise the arch bridge has been delayed.
The biggest unknown is the canal itself.
Last week, The New York Times published a devastating investigative story into problems with the canal expansion.
“The new locks, built by Panama without help from other governments, were sold to the nation and the world as a way to ensure that the canal remained as much of a lifeline in the hyperglobalized 21st century as it was in the last,” the reporters wrote.
But getting there has been difficult.
The government authority took the lowest bid for the job, bypassing companies with experience in large, complex projects, such as Bechtel. The winner was a Spanish-led consortium already in financial trouble and with a small budget.
The project was plagued by cost overruns, delays and infighting.
In the resulting expansion, specially ordered tugs had difficulty in the new locks; the quality of the concrete is a serious concern, and the canal faces a major earthquake risk. Even the availability of enough water is in question.
None of this changes some essential calculus for the Puget Sound ports: tougher competition — including the Canadian ports of Vancouver and Prince Rupert.
But the full effects of the Panama Canal expansion may take years to arrive.