Panama Canal Expansion Study

U.S. Department of Transportation

MARITIME ADMINISTRATION Brian P. Hill

MARAD – Western Gulf Gateway Office The Western Gulf Gateway Office area of responsibility includes all ports/waterways within Texas including the GIWW, and on the Arkansas River in Oklahoma.

MARAD Gateway Focus Areas: Advocacy & Outreach Grant Management /Infrastructure Inter-Agency Partnerships America’s Marine Highways (M-10 & M-146) Port Readiness/RFF

Port Infrastructure Needs

The Port Challenge: Failure to Act American Society of Civil Engineers Failure to Act Report 13 September 2012. Continued level of investment will cost 178,000 jobs/year and $4 Trillion by 2040. “The World Economic Forum now ranks US port infrastructure 22nd in the world, behind such countries as Iceland and Estonia.” (Source: Port Technology International, 12 January, 2012)

During a National Port Summit hosted by Transportation Secretary Ray LaHood, participants made it clear that port infrastructure suffers from a lack of focused and systematic investment. Participants also called for efficient and effective delivery of other Federal services if the system is to operate smoothly. (Second National Port Summit, April 21, 2011, Chicago, IL.)

Panama Canal Expansion Study

Purpose • Evaluate and assess anticipated economic and

infrastructure impacts on U.S. ports and freight transportation infrastructure.

Objectives • Provide foundation for a realistic understanding of the

impacts of Canal Expansion on U.S. ports and the National Transportation System.

• Identify range of needs for both private/public investment.

• Identify port and infrastructure policy opportunities for consideration by Federal government leadership.

Panama Canal Expansion Study Phases

Phase IV (Underway) Develop and Finalize Policy/Investment Recommendations Produce Final Report

Phase II/III (Completed July 2013) One-on-One Interviews with U.S. Maritime Communities On-Line Survey of Shipping Industry Representatives Peer Review Report

Phase I (Completed. Report released in November 2013) Public Listening Sessions Peer Review Phase I Report & Methodology by Industry Leaders

Phase I

Phases II/III

Phase IV

Panama Canal Expansion

Findings – Phase I

• Greatest impact will be on container traffic.

• East Coast can expect lower costs per twenty-foot equivalent units (TEUs) for vessels that utilize the Panama Canal vs. West Coast port of entry.

• Door to door transit times will depend on routing choices by shippers and freight forwarders.

• Ongoing infrastructure investments eastern U.S. railroads have made in anticipation of the Canal expansion may further reduce the cost of all water-shipping through East Coast ports.

• Overall impacts to U.S. ports and inland infrastructure will occur gradually.

Comparative Transit Times

Impacts of Panama Canal by Region

External Drivers Influencing Impacts

•Supply chain allocation of benefit (cost savings)

•Price point competition (railroad vs. canal)

•Commodities drive shipper decisions (time vs. cost)

Remaining Tasks

• Complete the internal review of the Phases

II – IV report

• Submit the Phases II – IV report to the Office of Management and Budget and the Office of the Secretary of Transportation for review and approval

• We hope to have the Phases II – IV report released later in 2014