Kurt Harris writes for the Rockford Register Star about the proposed Great Lakes Basin Railroad.

In my last article (Oct. 30), we looked at the economics of the Great Lakes Basin rail project from a local perspective, and found that there were not many reasons to recommend it, from a purely local point of view.

I have been really racking my brain to find reasons to like this rail project, because I care about this area, and I would hate to see us pass up any opportunity for economic development. So the question still remains: If somehow the local NIMBYs could be satisfied, and the project could be built, would it still make economic sense from a larger, non-local perspective? After all, the idea of saving time shipping around the great Chicago bottleneck still seems very attractive.

The answer is something like: Maybe, but not as much as a lot of people think. The reason is that while the GLB railway proponents have been working on their project, the people in the country of Panama have been busy making other plans.

On June 26, Panama finally completed its 10-year project of widening the Panama Canal. I know, you are saying “How could I have missed all of the headline stories about this?” Well, the reason is that the self-absorbed U.S. public cares more about the width of Kim Kardashian’s posterior than the width of the Panama Canal. Which one has more economic impact and would make for an interesting study?

Anyway, the canal project was designed to handle the latest generation of container ships, called New Panamax. They are 1.5 times the size of the older Panamax ships and can carry twice the amount of freight. The impact of this project is going to be delayed for a couple of years because no one knew for sure that Panama was going to be successful in completing it, and it will require billions of dollars in investments to upgrade ports on the U.S. Eastern seaboard. Port cities along the U.S. east coast, and as far away as Liverpool and Southampton in the UK, are already making the investments and will be ready to go in the very near future.

The final result will be that the container ships bringing Asian goods to east coast U.S. consumers will be able to bypass the west coast ports, and Warren Buffett’s trains, and deliver the containers directly to the east coast.

The real economic cherry on top of this dessert is the fact that the efficiency of shipping by water is something like 50 to 1 vs. shipping by rail. The Panamanians have built the ultimate Chicago bottleneck bypass.

The canal project is going to be real game-changer for shipping freight across the western hemisphere. Once all of the elements are in place, I don’t think that the GLB rail project is going to be nearly as attractive as it would have been a few years ago. As for the GLB investors, they will have to make their bets, and take their chances.