Ports ship up for widened Panama Canal

Updated 24m ago
By Rick Jervis, USA TODAY

NEW ORLEANS — Port officials from Savannah, Ga., to Mobile, Ala., to Long Beach are moving full steam ahead to expand and modernize their ports.

The eyed prize: luring anticipated increased ship traffic and bigger ships sailing through a widened Panama Canal, which is scheduled to open in 2014.

"Those who are best prepared when the recession ends will have the best opportunity for rewards later," said Don Allee, chief executive of the Mississippi State Port Authority at Gulfport, which is undergoing a $570 million expansion.

Panamanian voters in 2006 approved a referendum to expand the 48-mile canal's capacity, setting off a frenzy of new projects among competing U.S. ports. Despite a global recession and declines in revenue over the past year, ports are pushing to expand:

•The Port of Mobile is undergoing $600 million in upgrades, including a new container terminal and a turning basin for large ships. The port lost $225 million in revenue the past two years, said Jimmy Lyons, the port's chief executive.

•The Port of Savannah is midway through an eight-year, $500 million expansion that will nearly double its container capacity, executive director Curtis Foltz said. Port business was down 10% last year.

•The Port of Long Beach is spending $3 billion over the next 10 years to modernize its port, despite losing about one-third of its cargo business last year, spokesman Art Wong said.

The most heated port expansion competition is centered on the Gulf Coast. Port directors there believe they can lure the largest, 1,200-foot-long ships sailing from China and other Asian destinations laden with goods for the U.S., greatly boosting their business.

Many of those ships now dock at West Coast ports.

Port officials in New Orleans are trying to give their port a $250 million expansion. Plans to partner with private investors to shoulder part of the cost were stymied by the recession, said Gary LaGrange, the port's president and chief executive. The port has invested $33 million of its money and is looking to state funds and federal stimulus money to finish the job, he said.

"Everything came to sort of a screeching halt in the fall of 2008," LaGrange said.

It is unclear whether the global economy allows for enough waterborne trade to validate the billions of dollars in port expansions across the country, said Jim Brennan, a Washington-based port consultant.

"The question is whether the market will support those ships," he said.

Richard Wainio, head of the Port of Tampa, said his port has chosen a more cautious approach. A long-term expansion project underway there will continue only as the market develops, he said.

"A lot of ports are going forward with the 'We build it and they will come' approach," Wainio said. "We don't believe in that."

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