Panama Canal Expansion to Have Positive Effect on Texas Ports

The $5.25 billion expansion of the Panama Canal is expected to be completed by the end of 2014, and ports throughout the country are scrambling to position themselves to be able to accommodate the larger vessels carrying more cargo that are expected to add to the nation’s import-export business. In Texas, the Port of Houston, one of the nation’s largest ports, is leading the charge.

The Panama Canal expansion will result in more and larger vessels moving through American ports. Some federal funding is available from the U.S. Corps of Engineers for maintenance dredging, but those funds in the past have been limited. Those funds come from the Harbor Maintenance Tax levied on all ports. But those funds in the past have been limited, so the Port of Houston is planning on paying approximately $150 million of its own funds to increase the depth of waterways, including at the Barbours Cut and Bayport terminals.

The efforts of the Port of Houston and other Texas ports will be aided by the Texas Department of Transportation, which recently announced that it has created a Panama Canal Stakeholder Working Group to help prepare for the expansion. With the increased vessel traffic come other transportation issues – highway bottlenecks, bridges and links to terminals and support for rail investments for exports.

The group will be led by Harris County Judge Ed Emmett.

Emmett, who once served as a member of the Interstate Commerce Commission, is widely considered an expert on freight transportation issues and logistics. The working group will also include representatives of a variety of entities with an interest in the expansion of the canal.

“This collaboration presents us with an opportunity to fully understand the impact of the Panama Canal expansion on Texas’ imports and exports and to prepare for that impact.” said Emmett.

Other members of the working group in addition to Emmett include representatives from the Texas Association of Manufacturers, Texas Port Association, Texas Motor Transportation Association, Texas Farm Bureau, Economic Development and Tourism Division of the Governor’s Office, Port of Houston Authority, Texas Economic Development Council and BNSF.

“Bringing together a broad group of experts involved in freight movement in Texas will allow us to develop a comprehensive master plan that addresses connectivity with our ports and potential expansion of export opportunities,” said Bill Meadows, Texas Transportation Commissioner. “This Stakeholder Group will focus on enhancing and facilitating the flow of goods through and on our system, which does not stop at our ports, but continues through our major corridors such as I-35 and I-69.”

Plans are for the group to meet approximately once monthly for the next six months and will produce a report at the end of the year assessing the state’s readiness to maximize any opportunities the Canal’s expansion might bring.

Texas ports are gearing up because a recent study showed the Panama Canal expansion will allow demand for import and export shipments from Western Coast ports in the United States. And, that demand is likely to continue at a high rate in the future. But, those ports face physical and other limited constraints to expansion, which could result in more cargo instead being shipped through Texas ports.

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