{"id":16995,"date":"2016-06-23T11:36:33","date_gmt":"2016-06-23T16:36:33","guid":{"rendered":"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/?p=16995"},"modified":"2016-06-23T11:36:33","modified_gmt":"2016-06-23T16:36:33","slug":"as-expanded-panama-canal-prepares-to-open-new-york-isnt-ready","status":"publish","type":"post","link":"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/as-expanded-panama-canal-prepares-to-open-new-york-isnt-ready\/","title":{"rendered":"As Expanded Panama Canal Prepares to Open, New York Isn\u2019t Ready"},"content":{"rendered":"

\"ny<\/a><\/p>\n

Robbie Whelan<\/span> writes in The Wall Street Journal about the work needed before the East Coast\u2019s busiest port can\u2019t receive biggest ships.<\/p>\n

Ports on the U.S. East Coast have been hurrying to prepare their harbors, terminals and roads for the arrival of supersize container ships that are expected to pass through the Panama Canal once its expansion is completed later this month.<\/p>\n

But the East Coast\u2019s busiest port won’t be ready for them.<\/p>\n

Late last year, the Port Authority of New York and New Jersey announced that a project to raise the Bayonne Bridge, an 83-year-old arch that spans the channel between Bayonne, N.J., and New York\u2019s Staten Island, would be delayed until the end of 2017 because of engineering miscalculations and construction work slowed by inclement weather.<\/p>\n

Until the project is completed, larger ships passing through the Panama Canal will be unable to visit the three largest terminals at the Port of New York and New Jersey, located beyond the bridge in Newark and Elizabeth, N.J.<\/p>\n

The delays undermine the economic rationale for the expansion, and raise doubts about whether the wider canal will lead to an immediate surge in cargo headed for the East Coast. New York, with its bustling port and direct access to the densely populated Northeast corridor, was the destination many Asian exporters and shipping lines had in mind when they pushed for a wider canal.<\/p>\n

Some carriers now say they will hold off on booking voyages via Panama for their larger ships. Others are spending millions to retrofit bigger vessels they had already committed to routes between Asia and the East Coast, eating into the expected savings from sending those ships through the canal.<\/p>\n

If New York isn’t ready, it is unlikely that any U.S. East Coast ports will see the biggest ships either, according to Marc Bourdon, who heads the U.S. operations of France\u2019s CMA CGM Group, one of the world\u2019s largest shipping lines.
\nWorkers on the Bayonne Bridge elevation project. The 83-year-old bridge spans the channel between Bayonne, N.J., and Staten Island. ENLARGE
\nWorkers on the Bayonne Bridge elevation project. The 83-year-old bridge spans the channel between Bayonne, N.J., and Staten Island. Photo: HDR, Inc.<\/p>\n

\u201cWith the Panama Canal opening, I think you\u2019ll see some\u2026slightly larger vessels coming through, but not the biggest ones,\u201d Mr. Bourdon said. \u201cYou need New York to take them. It\u2019s the major port. None of the other ports along the coast would be able to sustain a vessel of that size.\u201d<\/p>\n

Shipping lines like CMA CGM want to boost traffic on direct routes between Asia and the East Coast because they can charge more to carry containers greater distances and save money by piling thousands more containers onto one ship. Shippers would also save because they wouldn’t need to book trains or trucks to carry their goods across the country. The cost of shipping a container from Hong Kong to New York rises by more than 50% if it is delivered to a West Coast port and moved overland the rest of the way, according to Catapult International.<\/p>\n

The U.S. Coast Guard approved the $1.3 billion bridge-raising in 2013. The project, and a $1.6 billion deepening of the harbor, were meant to prepare the region for the arrival of bigger ships.<\/p>\n

\"bayon<\/a>
\nCurrently, the largest ships that can visit the New Jersey terminals can accommodate between 9,000 and 10,000 20-foot equivalent units, or TEUs, a common measure of shipping container capacity. That was more than enough before the Panama Canal expansion, when ships that could pass through its locks topped out at fewer than 5,000 TEUs. But after this month, ships carrying 14,000 TEUs will be able to pass through.<\/p>\n

Delays have added hundreds of millions to the bridge raising\u2019s costs, according to a person familiar with the matter. Shipping lines are also paying a price.<\/p>\n

\u201cThe delay takes away the biggest market on the East Coast,\u201d said Paul Bingham, a port economist with EDR Group Inc. \u201cAs soon as you don\u2019t have a New York call, you\u2019re trying to justify the economics of the entire route. You have to calculate whether or not you can cobble enough demand together to make up for losing New York.\u201d<\/p>\n

Molly Campbell, the Port Authority\u2019s director of commerce, said she is \u201cheavily focused on getting that bridge done,\u201d but added that she doesn’t expect the widened Panama Canal to result in higher volumes of imports.
\nTop Logistics News<\/p>\n

Get the latest logistics and supply chain news and analysis via an email newsletter. Sign up here.<\/p>\n

\u201cThe carriers, their No. 1 concern is the Bayonne Bridge,\u201d said Gerry Wang, chief executive of Seaspan Corp. , which owns one of the largest fleets of container ships in the world and leases them to large shipping lines.<\/p>\n

He said his company and China\u2019s Cosco Group are spending about $5 million to modify 10 ships chartered for the Asia-to-East Coast trade so they will fit under the bridge. Each ship will have its funnel, a tube that discharges steam from its engine, cut down in height, a process that requires the vessel to miss weeks of service, Mr. Wang said.<\/p>\n

The delay in the Bayonne project is \u201cpart of the reason why the ship charter market is very sluggish, this uncertainty,\u201d he said.<\/p>\n

Shipping-industry experts say the delays may be a temporary setback, and that demand for Asia-to-East Coast shipments is sluggish due to other factors, including weak global economic growth. Many of the improvements intended to accommodate larger ships, such as the harbor deepening and new equipment, will be needed once the bridge project is completed.<\/p>\n

McAllister Towing and Transportation Co. Inc. ordered three custom, high-powered tug boats a year ago to handle larger container ships that now may not call in New York Harbor for years. Each costs between $10 million and $15 million to build, said Capt. Steve Kress, vice president of McAllister\u2019s New York operations.<\/p>\n

\u201cThe announcement of the delay of the bridge was a surprise to us. It\u2019s a disappointment,\u201d he said. \u201cBut either way, the newer tugs have to come, if you want to stay competitive in this game.\u201d<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Robbie Whelan writes in The Wall Street Journal about the work needed before the East Coast\u2019s busiest port<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[242,10,12,241,39,34,33,62,219,245,243,7,244,44],"class_list":["post-16995","post","type-post","status-publish","format-standard","hentry","category-news-articles-panama-perpsective","tag-boca-chica-real-estate","tag-bocas-del-toro","tag-boquete","tag-boquete-real-estate","tag-buenaventura","tag-casco-antiguo","tag-casco-viejo","tag-coffee-in-panama","tag-move-to-panama","tag-offshore-real-estate-panama","tag-panama-papers","tag-panama-real-estate","tag-rum-in-panama","tag-travel-to-panama"],"yoast_head":"\nAs Expanded Panama Canal Prepares to Open, New York Isn\u2019t Ready - Blog and Newsletter<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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