Panama Canal expansion : the effect of imports and exports diverted from California seaports on the Port of New York and New Jersey.

PDFTech Report49997-23-25ExportsImportsSeaportsPortsInput output modelsEconomic modelsTradeEstimatesUnited StatesUniversity at Buffalo, SUNYPark, JiYoungPark, ChangKeunRichardson, Harry W.University at Buffalo, SUNYUniversity Transportation Research CenterUS Transportation CollectionIn 2006, the Panama Canal Authority decided to expand the Canal by investing more than $5 billion to accommodate bigger vessels than now to traverse the current facility. Along with the Nicaragua Canal construction that is optimally expected to finish 2019 (Miller, 2014), the widening of the Panama Canal will allow larger tankers to be able to go directly to the East or Gulf of Mexico ports and bypass the West Coast ports where so many imports currently change modes to cross-continental trucks or rail. The West Coast ports will become less important while the freight shares of the East Coast and Gulf ports will increase. Hence, the Panama Canal expansion project is expected to impact U.S. water and ground freight transportation systems significantly (including cargo distribution, port development, U.S. supply chains, and logistics).A greater flow of container trade between various Asian countries and the U.S. is expected. Increased trade volumes that arrive at South and East Coast ports are expected, reducing the congestion experienced in West Coast ports because of the high shipping cargo shift. By how much is not easy to predict, but this study attempts to define some of the key parameters: the baseline of cross-country shipments; current and proposed investments by individual ports in capacity expansion; the export-import ratios at different ports (return freight to origins will have a significant impact on estimation decisions); and the rationale for truck and rail operators and business corporations to change their behavior.Estimating the U.S. economic effect of the Panama Canal expansion is complicated. The simplest way to approach the problem is to apply a spatially disaggregate inputoutput (IO) model. The National Interstate Economic Model (NIEMO), which models all interstate trade relations among the U.S. states, is a useful application model for this purpose. As Park (2008) suggested, imports and exports require a separate IO model application, and NIEMO\ue2\u20ac\u2122s capability to estimate demand- and supply-side impacts is important to this type of study. Larger ships passing through the Canal will redirect sizable water-borne trade among U.S. ports, affecting the use of other freight modes.In this study we provide estimates using secondary import and export data available from WISERTrade (www.wisertrade.org). We measured the positive effects of reduced seaborne imports and exports to the West Coast Customs Districts (WCCD: Los Angeles Customs District, San Francisco Customs District, Columbia-Snake Customs District, and Seattle Customs District) on the Port of New York and New Jersey. With the Canal expansion, reduced port activities would occur in California, Oregon, and Washington, the states that receive foreign imports and send U.S. exports abroad. However, concurrent positive effects in the South and East Coast states should be considered from increased imports and exports.To measure positive effects of the Port of New York and New Jersey, we assumed: all foreign imports and U.S. exports that currently arrive and leave in the WCCD ports to be transported to the South and East Coast states via truck and rail modes would be directly shipped to the Port of New York and New Jersey through the deepened Panama Canal then distributed to the other states in the South and East Coast by the equivalent or smaller vessel