Rob Harrison's presentation at the 2017 CTR Symposium http://ctr.utexas.edu/ctr-symp/

1. COLLABORATE. INNOVATE. EDUCATE.
The New Panama Canal Locks:
Open for Business
Robert Harrison and Leigh Boske
TxDOT Project 5-6690
RTI Manager: Joe Adams
TxDOT Manager: Arielle Carchidi - Maritime Division

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RTI 0-6690
• 0-6690-1:PRP US-Asian-South American
Waterborne Trade and Panama Canal
Expansion
• 0-6690-2: Trade Flows, Texas Ports, and
Panama Canal Expansion
• 5-6690: Implementation Project and Technical
Briefs on Impacts of the New Locks

3. COLLABORATE. INNOVATE. EDUCATE.
Maritime Shipping 2017
• Global trade is low – strong US dollar
• Carrier new ship orders since 2000 created a
gap between supply and demand
• Huge losses – global containership revenue
has dropped 21% since 2010 and net earnings
down 68% to $10 billion
• Bankruptcy of Hanjin, formation of Alliances
• Bulk shipping in poor shape – early scrapping

4. COLLABORATE. INNOVATE. EDUCATE.
Panama Canal Background
• Canal Built 1904-1914
• US Isthmian Canal Commission (ICC) oversaw
construction, controlled the Zone over which US
had sovereignty
• Limited strategic role in WW2
• Canal neglected and outdated after 1950
• Tolls based on maintenance, not markets
• Lock limits too small for post-1970 ships

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Battleship Deployment 1919

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1980 IOWA Class Battleship

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Panama Assumes ICC
Responsibilities
• Carter- Torrijos Treaty 1977
• Strong Objections
• Senator Hayakawa
• December 1999 Panama took Responsibility
• Panama Canal Authority (PCA) runs the
waterway

8. COLLABORATE. INNOVATE. EDUCATE.
Panama Canal Authority 2000
• Panama Canal (PC) seen as the major
economic engine – like Suez Canal
• Panama Canal Authority (PCA) strategies –
short, medium, and long term
• Panamax designs inefficient
• New locks critical to accommodate larger
ships

9. COLLABORATE. INNOVATE. EDUCATE.
Panamax Auto Carrier

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Cruise Ship Squeeze

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Container Ship

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Third Set of Locks

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Ships and Boxes
• Dry bulk; tankers; vehicle carriers; LNG;
breakbulk; cruise ships; refrigerated;
containers; others
• Trade is not simply containers (boxes)
• Transportation investments, however, sharply
focus on boxes
• Maritime and domestic containers differ
significantly in design and weight

14. COLLABORATE. INNOVATE. EDUCATE.
Emma Maersk Class

15. COLLABORATE. INNOVATE. EDUCATE.
Panama Strategies to Grow
Maritime Services
• Short Term
– Dredge channels, upgrade existing locks, plan and
finance new locks
– Market-based prices – tracking Suez Canal
• Medium Term
– Build and operate new locks and associated
equipment
– Build out associated marine services
• Long Term
– Make Panama a logistics platform for global trade
– Supporting national employment and income

16. COLLABORATE. INNOVATE. EDUCATE.
Transisthmian
Pipeline
Colon
Free Zone
Fiber Optic Duct Banking
Center
Panama-Pacific
Special Economic
Zone
Real EstateTechnology and
Innovation Center
Value-Added Components of Panama’s
Transportation and Logistics Cluster

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As of 2016, Suez Canal
fully bi-directional
Wall Street Journal

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Maersk Triple E Class

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Importance to Texas and Global
Trade
• Gulf energy, chemicals, plastics, and
agricultural product volumes are growing
• Houston (population), Mobile (retail and CN),
and New Orleans ports increasing imports
• Exports – already Texas #1 – will grow by both
ship and rail
• Box shortage at TX coast but not at Alliance
• Transloading vs. direct service

20. COLLABORATE. INNOVATE. EDUCATE.
Impact on Texas Ports and TxDOT
Infrastructure
• Texas ports will need to balance growth in the
terminal and channel investments with highway
and rail access
• Rail preferred for agricultural exports
• Rail will strive to hold the B/E line at IH-35 for West
Coast services
• Ports will hold delivery limits at distribution centers
near port and within Texas Triangle
• Maritime shipping faces a slow recovery

21. COLLABORATE. INNOVATE. EDUCATE.
Tridem Trailers for Houston?

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Questions?