I would like to share with you some of the biggest news yet from IRPT. On December 13th, 2016, Inland Rivers, Ports & Terminals (IRPT) will be signing a Memorandum of Understanding with the Panama Canal Authority (ACP) in Panama. This Memorandum of Understanding is important to all of our inland river ports, terminals, and river-borne transportation services and will recognize the importance of promoting waterway shipping.
To IRPT Members: IRPT and the ACP are excited to WELCOME YOU to Panama. Susan Livorsi (IRPT) is working with a local travel agent in St. Louis, MO, to help make the arrangements for this historic trip. At this point we are hoping to keep the final cost for this trip to under $1000.00 per person. If you are interested in attending, please let us know immediately.
IRPT is a non-profit entity whose mission is to be a resource for inland river ports, terminals, and river-borne transportation services and to promote the value of the inland river transportation system to users. IRPT promotes foreign and domestic commerce, economic development and job creation throughout the inland waterway system and has been working to bring container on barge (COB) shipping to the Mississippi River and its tributaries. As this project moves forward, the parties will promote the use of the Panama Canal for vessels calling on U.S. Gulf ports.
The Panama Canal Authority is the organization in charge of managing, operating and maintaining the Panama Canal, one of the main links of world commerce. The ACP has recently completed a multi-billion-dollar expansion project that will double the waterway’s capacity and will allow for the transit of larger and wider vessels. The expansion will result in economies of scale in shipping and an improved transportation system through Panama.
IRPT’s members are located on the United States inland river system and are a major source of export and import generation for the economy. Members depend heavily on foreign trade routes such as the Panama Canal. Both IRPT and ACP are constantly undertaking a series of activities aimed at fostering the growth of global commerce and desire to cooperate in creating awareness of the benefits derived from the Canal expansion and from the optimization of existing inland transportation that is used to move various commodities from and to the United States through the Panama Canal.
According to a SWOT analysis performed by Booz, Allen and Hamilton, strengths of the canal expansion include:
- Bulk and break bulk freight markets – agriculture, coal, petroleum, chemicals – good base of export tonnage
- Mississippi River connectivity to inland US and international locations – bulk goods movement
And opportunities include:
- Near-term and long-term diversion opportunities oriented toward Latin America and Mexico with containerized cargo
- Well positioned to focus on select industries/commodities with a niche differentiation strategy rather than focusing on a broad market scope strategy
- Possible beneficiary of increased trade with Caribbean transshipment strategies and or rise of smaller/mid-sized ports based upon the anticipated congestion at larger ports
Researcher Anthony Ross at the University of Wisconsin-Milwaukee’s Lubar School of Business said “The assumption that only eastern states will have a cost advantage to using the canal may not be true. The dynamics of steam time, ship size and fuel surcharges can be important drivers extending the north-south running westward” along the Gulf Coast, including the ports of Houston and Gulfport, Mississippi. The Panama Canal should be thought of as a strategic bridge between Asia, the east coast of North America and to South America. JOC.com: http://www.joc.com/maritime-news/trade-lanes/trans-pacific/panama-canal-expansion-delays-could-benefit-gulf-ports_20141003.html
To better understand the potential effects of the Panama Canal Expansion, I would like to draw your attention to a report published in 2015 by the Boston Consulting Group and C.H. Robinson titled, “Wide Open: How the Panama Can Expansion is Redrawing the Logistics Map” http://www.panamacanal.salini-impregilo.com/static/upload/bos/bostongrouponpanamajune2015.pdf
More specifically, the report suggests the East Coast Ports stand to gain 10% additional share of container traffic from East Asia to the U.S. On page 8, the report states, “this shift of up to 10% will fundamentally alter supply chains. Notably, the battleground on which U.S. ports compete with one another for customers will likely expand and move several hundred miles west, toward Chicago and Memphis.” In addition, the report states, “Growth rates for the larger ports on the West Coast will decrease, competition among East Coast ports will intensify, and rail and truck traffic patterns will shift.”
On May 27th, 2016, IRPT submitted a MARAD Grant Application for a Container-On-Barge (COB) Planning Project. This was a partnership grant application. Partners included: The Mississippi Rivers Cities & Towns Initiative (MRCTI), Inland Rivers Ports & Terminals (IRPT), and the Upper Mississippi River Basin Association (UMRBA). This partnership joined the City of St. Louis, MO, Port Authority (the Authority) to form a team of applicants for MARAD’s “Funding Opportunity for America’s Marine Highway Projects.” This team will ask the ocean carriers how COB shipping can help them attract more business. The partnership will call upon the major steamship lines to determine what obstacles they have encountered to inland shipping, what new technology or government mandates will drive their decisions, how can COB swing the cost-benefit calculus to their advantage. After our introductory conversations, we will hold roundtable meetings in Washington, DC, New York City, and an M/35-M/55 port city.
The primary goal of the project is to determine what helps or hinders the movement of containerized goods along the Mississippi River by ocean carriers and major shippers.
I hope you all find this news to be as exciting as I do! If you wish to be a part of the historic signing in Panama, please let me know as soon as possible.