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1:05 am
Mon May 6, 2013

Port Of Baltimore Seeks Boost From Panama Canal Expansion

Originally published on Mon May 6, 2013 8:59 am

There is constant motion around four new supersized, Chinese-made cranes as they unload cargo from a ship at the Port of Baltimore's freshly constructed Seagirt Marine Terminal.

Control cabs whir across the cranes' broad steel beams, and thick cables spin from giant wheels. Containers packed with consumer goods — TVs, clothing and the like — are hoisted from the ship and transferred to a flatbed truck waiting 140 feet below; the truck then peels away and is immediately replaced by another. It's a fluid, seemingly effortless process — surprising considering the size of each crane.

"If you look at one of these cranes, you would be looking at a 40-story building," says Mark Schmidt, the terminal manager. "With the boom up and fully erected, they're about 400 feet tall."

Schmidt is with Ports America, which signed a 50-year lease with the Maryland Port Administration to operate the terminal. Ports America invested roughly $250 million in the project, in expectation of the widening of the Panama Canal.

'A Significant Change'

When the project to widen the canal is completed in 2015, longer and wider ships will be able to pass through its locks, giving them access to ports on the Gulf of Mexico and the East Coast. But at the moment, the Port of Baltimore is one of only two on the East Coast (the other is the Port of Virginia in Norfolk) that can handle the large cargo ships, known as post-Panamax ships. It recently completed a major expansion, which included building a 50-foot berth and dredging the channel.

Mark Montgomery, the president of Ports America Chesapeake, says much rides on the canal's expansion.

"It will allow a ship that is three times as big to come through the canal once the widening project is finished," he says. "It's a significant change in maritime economics."

Bigger ships mean more cargo containers, which can translate into an economic windfall for a port, says Adie Tomer, a transportation and infrastructure specialist at the Brookings Institution.

He says since it was announced that the Panama Canal was being widened, there's been an "arms race" between ports across the country.

"What that arms race has kind of been about is based on this assumption that with a snap of the finger, of when the canal widens, all of a sudden, massive new ships carrying extremely large loads of containers will be entering and exiting ports in the states," Tomer says.

West Coast Ports Affected

He says Baltimore and Norfolk have a competitive edge as companies begin to choose what ports to use once the canal's expansion is complete. But it's not good news for West Coast ports such as the Port of Los Angeles and Port of Long Beach, where megaships from Asia have docked since the mid-1990s.

Khalid Bachkar, an assistant professor at the California Maritime Academy, says the West Coast ports accounted for about 75 percent of all Asian imports.

"The ship will come to the West Coast, and then [cargo] will be transported via rail to New York," he says. "However, now, with the opening of the Panama Canal, there are many competitors."

Bachkar says within the next decade, many more ports on the East Coast — such as New York — and in the Gulf will build up their infrastructure and dredge their channels in order to accommodate the huge container ships.

Tomer of the Brookings Institution says in the world of international shipping, a multitude of dynamics determine a port's fortunes.

"Even though we might feel like we're in competition with one another, we're also in competition with other ports across the globe," he says, "new ports opening on the Mediterranean side, of course in Southeast Asia are expanding, even beyond the classic Chinese ports."

Tomer says there's no guarantee that trade will always move in the same direction and between the same markets.

James White, executive director of Maryland Port Administration, says he agrees. Already, he says, the manufacturing base is starting to shift from Asia to Southeast Asia — to countries such as Cambodia and Vietnam.

"I think we're probably going to see, within the next five to 10 years, most of the transits, if that continues, to come to the Suez Canal, with the Panama Canal getting maybe some overflow," he says.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, HOST:

On a Monday this is MORNING EDITION from NPR News. I'm David Green. It has been years and billions of dollars and the project to widen the Panama Canal is almost complete. This should allow much larger ships to come from Asia to the east coast of the U.S. But only to ports that can accommodate the bigger freighters will benefit. NPR's Jackie Northam visited Baltimore, which has expanded its port in hopes of cashing in.

JACKIE NORTHAM, BYLINE: Like any port in any city, there's a rough and tumble feel to Baltimore. Its waterfront provided a backdrop one season in the gritty television series "The Wire."

(SOUNDBITE OF WHIRRING)

NORTHAM: There is constant motion around four new super-size Chinese-made cranes as they unload cargo from a ship at the port's freshly constructed Seagirt Marine terminal. Control cabs whir across the cranes' broad steel beams, thick cables spin from giant wheels.

Containers packed with consumer goods - TVs, clothing and the like - are hoisted from the ship and transferred to a flat bed truck waiting 140 feet below. It's a fluid process - surprising, considering the size of each crane.

MARK SCHMIDT: So if you look at one of these cranes, you would be looking at a 40 story building. With the booms fully up and erect, they're about 400 feet tall.

NORTHAM: Mark Schmidt is the terminal manager. He's with Ports America, which signed a 50 year lease with the Maryland Port Administration to operate the terminal. Ports America invested roughly a quarter of a billion dollars in the project, bringing in the four massive cranes, building a 50 foot berth, and dredging the channel.

What's driving these improvements is the expansion of the nearly century-old Panama Canal.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN: Originally specified to be 200 feet in width at the bottom, President Roosevelt - TR, that was - ordered the dimensions changed to 300 feet, costing the United States an extra 13 millions of dollars, and well worth it.

NORTHAM: Grainy archival footage shows laborers digging deep into rich, dark earth. When it was completed in 1914, the Panama Canal was considered an engineering wonder. But what worked nearly 100 years ago doesn't now. Today's ships are much bigger and cannot get through the canal. Mark Montgomery, the president of Ports America Chesapeake, says the canal's new locks will change all that.

MARK MONTGOMERY: It will allow a ship that is three times as big to come through the canal once the widening project is finished. It's a significant change in maritime economics.

NORTHAM: Bigger ships mean more cargo containers, which can translate into an economic windfall for a port, says Adie Tomer, a transportation and infrastructure specialist at the Brookings Institution. He says since the Panama Canal widening was announced, there's been a, quote, arms race between ports all across the country, even up into Canada.

ADIE TOMER: What that arms race has kind of been about is based on this assumption that kind of on the snap of the finger, of when the canal widens, all of a sudden massive new ships carrying extremely large loads of containers will be entering and exiting ports of the United States.

NORTHAM: At the moment, Baltimore and Norfolk, Virginia are the only ports on the East Coast capable of handling the super-sized ships known as post-Panamax ships. Tomer says that gives them a competitive edge as companies begin to choose what ports to use once the Panama Canal expansion is complete.

But it's not good news for West Coast ports such as Los Angeles and Long Beach, where the mega-ships from Asia have been docking since the mid-90s. Khalid Bachkar, an assistant professor at the California Maritime Academy, says the West Coast ports accounted for about 75 percent of all Asian imports.

KHALID BACHKAR: The ship will come to the West Coast and then will be transported via rail to New York. However, now, with the opening of the Panama Canal, is many competitors.

NORTHAM: Bachkar says within the next decade many more ports on the East Coast like New York and in the Gulf will build up their infrastructure to accommodate the huge container ships. The Brookings Institution's Tomer says in the world of international shipping there are a multitude of dynamics that determine a port's fortunes.

TOMER: Even though we might feel like we're in competition with one another, we're also in competition with other ports across the globe. New ports opening on the Mediterranean side, of course in Southeast Asia are expanding, even beyond the classic Chinese ports.

NORTHAM: Tomer says there's no guarantee that trade will always move in the same direction and between the same markets. Jackie Northam, NPR News. Transcript provided by NPR, Copyright NPR.