The Panama Canal’s expansion last year has led to a significant increase in traffic, particularly of larger Neo-Panamax ships from Asia able to carry 13,000 containers. That increase has consequently also led to increased business at Southern U.S. ports.

 

For instance, Georgia Ports Authority and the Port of Virginia, which are the nation’s fourth and fifth largest ports ranked by volume, respectively, each moved the most cargo they have ever handled in May, a Bloomberg article explains. The two ports posted more than 10 percent year-over-year volume growth for the month.

 

Those ports aren’t alone in such growth either. South Carolina Ports Authority, which includes Charleston, had its best ever month in March and overall volume from last July through May is up 9.4 percent compared to the previous July to May period, the port authorities report.

 

“We’ve candidly been surprised by the strength of the volume growth for the first part of this calendar year,” Jim Newsome, president and chief executive office of South Carolina Ports Authority, told Bloomberg. “January through April has been very strong.”

 

The growth in foreign trade throughout the region comes, in part, from last June’s widening of the Panama Canal, which allows the larger vessels that shipping lines favor to travel between Asia and the Eastern U.S. seaboard through the passage. Previously, ports on the West Coast, which include the nation’s largest by volume, typically handled such ships because they were too large to pass the Panama Canal.

 

The expansion also coincided, however, with a population boom that has made the south home to 10 of the 15 fastest growing cities, according to the U.S. Census Bureau, so there is a growing market for goods being imported. At the same time, manufacturing growth throughout the south means shipping lines also can pick up American-made exports to transport abroad. Indeed, a more even trade balance compared to West Coast ports, which rely more heavily on imports, is an attractive draw for shipping firms considering southeastern ports, Moody’s Investors Service analyst, Moses Kopmar tells Bloomberg.

 

Writing on AL.com, Ben Kennemer, Vice President of Business Banking at Bank of America Merrill Lynch, explains that, to prepare for the Panama Canal’s expansion, the Port of Mobile (Alabama) began work to widen and deepen the Mobile Bay Channel and create an anchorage area, automobile terminal and intermodal railway with a truck bridge connector. In addition, the port expanded the current container terminal and will add multiple super post-Panamax cranes.

 

Beyond port infrastructure improvements, shipping giants Maersk and Mediterranean Shipping Co. have announced a weekly Panama Canal service linking Asia with the Port of Mobile, Kennemer writes. It hasn’t taken long to see the impact, with both the Alabama State Port Authority and APM Terminals reporting larger and additional container ships on a weekly basis, he continues.

 

“While it may appear that Mobile will reap the biggest benefits from this shipping influx, the effects will span the entire state. Larger ships bring increased logistics work; increased cargo means more people operating machinery are necessary to move materials into warehouses and those machines require fuel and maintenance to operate,” Kennemer writes. “In addition to the Port of Mobile’s infrastructure updates, Mobile offers trucking routes to key southeastern markets, North American rail access and connectivity to nearly 15,000 miles of inland waterways as far as the Great Lakes—putting the port in a desirable position for exporting international container shipments.”

 

What are your thoughts on increased shipping traffic—both importing and exporting—at Southern U.S. ports? What role do those ports play in your company’s supply chain?