Canal expansion sets off race among Gulf ports

With the recession showing signs of ebbing, Gulf of Mexico ports hope hundreds of millions of dollars in expansion projects proposed before the downturn will help them capture more trade as the world economy recovers. A $5.25 billion project to expand the Panama Canal will allow the largest container ships to cut through to the eastern side of North America—and perhaps cut into the dominance of West Coast ports handling freight from Asia. Even though the downturn has clouded future trade patterns, port officials say now is the time to be getting ready. Expansions pegged to the Panama Canal project, which is due for completion in 2014, had largely been on the drawing board before the recession began. The Panama Canal project, approved by Panamanian voters in a 2006 referendum, involves construction of two larger locks expected to double the 50-mile canal’s capacity within 20 years. The project includes $2.3 billion in institutional financing. The waterway now moves about 5% of the world’s cargo. The largest container vessel that can now use the canal has a capacity of about 5,000 TEUs—or 20-foot-equivalent units, generally the standard container size that can be transferred easily from ship to rail or truck. The expanded canal will be able to handle giant ships that can carry more than 14,000 TEUs.