Work Group Looks for Ways Texas Can Capitalize

On Panama Canal Expansion and Trade

 

August 11, 2012

 

(On December 13, 2012, the Work Group presented a report to the Transportation Commission. You can download a copy of their extensive report [HERE].)


When the Panama Canal deepening project and new locks are completed in 2014 they will define a new class of larger vessels that will fit within the restrictions of the channel and locks.  Ships are divided into various classes and these vessels are being called “New Panamax.”


For 100 years the canal’s locks have limited passage to “Panamax” ships with no more than 965 feet in length and 106 feet in width.  Chambers in the new locks will allow passage of ships “New Panamax” ships up to 1,200 feet in length and 160.7 feet in width.  The depth of the canal is being increased from 39.5 feet to 50 feet. 


Bigger ships mean greater shipping efficiency and will bring increased traffic to Texas seaports, highways and railroads.


The Texas Department of Transportation (TxDOT) has created a Panama Canal Stakeholder Working Group.  TxDOT is seeking input from members and the public on ways the department can help in ensuring that Texas is well-positioned to capitalize on canal expansion-related economic opportunities.


The Working Group is holding meetings along the Texas Coast with stops in Houston on Aug. 27, Beaumont on Aug. 28, Dallas-Fort Worth on Sept. 7 and Brownsville on Sept. 14.  They will wrap up their work Nov. 12-13 at TxDOT’s offices in Austin.  The group met in Corpus Christi on Aug. 1 and heard about South Texas freight issues including needed highway and rail projects.


No Texas or Gulf Coast port has a ship channel deep enough to take full advantage of the deeper and wider canal.  Industry experts are predicting that the impact of opening the canal is likely to be modest at first but very significant in future years.  The process of adjusting the components of freight infrastructure is almost always measured in decades instead of years.Terry Simpson


Most of the attention on greater Panama Canal traffic has been on containerized cargo and giant new container ships that will be able to connect the Pacific Rim with Gulf and East Coast ports and the manufacturers and consumers they serve.  These behemoth ships will not be able to call at any Texas port fully loaded and instead are likely to deliver and pick up boxes at Caribbean hubs like Kingston, Jamaica.  Smaller ships will make the shorter runs to and from U.S. ports.


The canal expansion will also provide potential cost savings for U.S. export shipments of bulk cargoes such as chemicals, grain, coal, fuels and liquefied natural gas.  Bulk cargo shipping is the area where Texas ports excel.


"Preparing the state's infrastructure for such an expansion, in terms of sea and land-based infrastructure, is crucial to accommodating this increased freight traffic," said State Representative Larry Phillips.


The Work Group will produce a report by year's end assessing the state's readiness to maximize any opportunities the canal's expansion might bring. The group will be led by Harris County Judge Ed Emmett, a former state representative, and former member of the Interstate Commerce Commission. Before becoming County Judge, Emmett was a recognized expert on freight transportation issues and logistics.

 

TRANSPORTATION INVESTMENT NEEDS

The report will include a review of opportunities for expanding Texas exports and imports, a summary of existing plans for highway, rail and port projects and an assessment of future transportation investment needs. It will also attempt to identify projects and policies that will enhance Texas' position in global trade.


"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." Emmett said.

 

WORK GROUP MEMBERS
The Work Group includes representatives from the port, agriculture, trucking, manufacturing, government, oil and gas, and rail industries including 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, BNSF, and Judge Emmett.


"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."


Emmett has said that regardless of the Panama Canal, if Texas does not invest in infrastructure to move freight into and out of our ports, then the state is going to miss a golden opportunity to continue growing, and the state’s economy will stagnate.