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The Panama Canal Expansion: Completion is Finally Upon Us

The expansion of the Panama Canal and its impact on global trade has been discussed quite extensively over the last five or more years in the port, maritime and logistics world. In the US, the discussion has largely focused around the potential impact for West Coast ports and transcontinental rail, as well as preparations at US East and Gulf Coast ports to accommodate the new and larger vessels.

Ports in areas of Latin America and the Caribbean have also had visions of upside growth fueled by the potential of larger vessels and the opportunity associated with changed vessel route patterns. The very long lead time ahead of this massive infrastructure project is nearly complete, and we shall begin to see the extent of real-world supply chain adjustment. With a focus on North America, this brief article provides a summary look behind the issue of seaport competition to review how an expanded canal may be an influencing factor for some global corporate supply chains.

For more than a century now, the Panama Canal has enjoyed a prime location at the crossroads of two oceans and two continents as the fastest all-water route between Asia and the eastern areas of North and South America. With the lock expansion now nearing its final stages, the expanded canal will provide new options for supply chain managers, including both in-house and outsourced logistics managers. The issues are far more complex than pure transportation considerations and instead reference a wider set of company and sector-specific supply chain considerations including sourcing/procurement strategy, customer market development strategies, and decision-making around production centers and distribution facilities. The net result of these amalgamated decisions…

Adam Wasserman, Managing Partner, GLD Partners

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