Impact of the Panama Canal Expansion on Railroads

An Overview of the Panama Canal Expansion Project

The Panama Canal expansion project began in 2007. This project was aimed at expanding the Panama Canal so as to enable bigger vessels to use the famous waterway. Even though the multimillion-dollar project is expected to be completed in 2015, there have been substantive changes within the canal. This has sparked off a worldwide debate on the canal expansion project as well as its implications on varied infrastructure and trade in general.

Following the completion of the first phase of the expansion project, vessels as large as 12, 000 TEU containers have been able to use the canal. This is a great improvement from the previous 5,000 TEU limitation that led to the diversion of trade vessels to other trade routes. Already there is a remarkable improvement in traffic along the canal as a result of this expansion project. This has also improved trade prospects with economists predicting even bigger gains. There are many impacts that the Panama Canal expansion project will have on the railroad systems especially within the East Coast side.

The Impact of the Expansion Project on Railroads

Different states on the east coast have taken up initiatives to improve their railroads in preparation for the completion of the Panama Canal expansion project. This is because they do not want to miss out on the potential benefits in terms of trade and other opportunities that the expansion of the canal promises. Amongst the key impacts that this expansion project has had on railroads include:

• Expansion of the railroads. Major states and cities in the East Coast as well as some in the West Coast are currently engaged in big railroad expansion projects. They are adding up tracks to ensure that by the time the Panama Canal expansion project is completed, these railroads will be able to handle more cargoes and different trains will move at the same time. This is aimed at enhancing efficiency within the railroad distribution system.
• Construction and improvement of railroads near the ports. There has also been a rush to construct new railroads that link up with the ports where there were none and improve existing ones. This move is important because the distribution of the cargoes is expected to begin at the ports and the railroads being linked up to the ports will come in handy in easing congestion at the ports and transporting the cargoes faster.
• Improvement of velocity in the rail systems. The speed of the trains will be improved in order to ensure that cargoes are delivered on time. This will also ease traffic at the ports and restore the confidence of traders in the distribution of important commodities via the railroads.

The improvements being made on the railroads have not been welcome everywhere. Some experts have been quick to criticize the focus on railroad expansions by pointing out that the completion of the Panama Canal expansion project does not necessarily guarantee an influx in trade and transportation opportunities. Such skepticisms have fallen on deaf ears with most states partaking into the railroad’s improvement projects.

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Online sources:

http://www.progressiverailroading.com/csx_transportation/article/Panama-Canal-expansion-spurs-railroads-ports-to-prepare-for-new-business–35793

http://www.truckinsurancenitic.com/recent-news/94-panama-canal-expansion-will-affect-u-s-trucking-industry-report-says

www.inboundlogistics.com/cms/article/the-panama-canal-expansion-will-be-a-supply-chain-game-changer/

http://www.bigtruckguide.com/panama-canal-expansion-affect-truckers/