THE SOUTHERN OFFICE OF THE COUNCIL OF STATE GOVERNMENTSPO Box 98129 | Atlanta, Georgia 30359

ph: 404/633-1866 | fx: 404/633-4896 | www.slcatlanta.orgSERVING THE SOUTH

Sujit CanagaRetna Senior Fiscal AnalystSouthern Legislative ConferenceMarch 2013

Southern LegiSLative ConferenCe

of

the CounCiL of State governmentS

2013 UPDATE ON THE PANAMA CANAL EXPANSION AND PORTS IN THE ATLANTIC AND GULF COAST STATESAN ISSUE ALERT FROM THE SLC

Photo courtesy of the Port of Charleston

A Transformative Global Transportation Project: Panama Canal Expansion

The ongoing Panama Canal expansion is perhaps the most transformative global transportation project now in progress. Upon comple tion in 2014, the expanded Panama Canal will facilitate an even greater flow of trade between Asia and the Americas and will substantially impact the volume of trade reaching Gulf and Atlantic Coast ports in the United States. The impetus for the expansion of the Canal, approved by the people of Panama in October 2006, sprang from that nation’s desire to continue as a pivotal player in global trade patterns and strategically leverage its greatest asset—the Panama Canal—for its own econom-ic well-being.

For Panama, the only nation in the world with port ter-minals in two oceans, the Canal plays an extraordinary role, impacting practically every aspect of society. At the economic level, activity flowing from the Canal ac-counts for nearly 15 percent of gross domestic product, a clear indication of the enormous economic foot print of the Canal on the nation. The expansion project not on-ly will ensure the Canal’s dominance as one of the most critical global transportation linchpins, but it also will strengthen the links between Asia, the United States and Latin America.

Forces Driving the Panama Canal ExpansionA few decades after the American-led effort to construct the Panama Canal, completed in 1914, discussions on ex pansion plans already were underway. The 48-mile waterway connecting the Pacific and Atlantic oceans,

known as the Panama Canal, then constituted, and still re mains, one of the most revolutionary navigational wa-ter channels in history. The Canal shortened the distances between the East and West Coasts of the United States substantially; a vessel sailing from New York to San Fran-cisco could cut its journey from more than 13,000 miles around South America and Cape Horn, to slightly more than 5,000 miles, a significant savings in terms of both time and resources.

During the years leading up to World War II, serious dis-cussions and pre liminary excavations on this expansion effort were held, but the initial momentum fizzled. In the seven decades after World War II, the role of the Canal was magnified with the immense growth of global trade. As the first decade of the 21st century advanced, this surg-ing world trade result ed in horrendous traffic jams, with a staggering number of colossal ships dropping anchor and waiting their turn to transit. On the Atlantic side, these ships were laden with grain from the Midwest, computer and electronic prod ucts from Florida, coal from Appala-chia heading to Asia and, on the Pacific side, crammed with consumer durables and electronics from Asia heading to the American East Coast. The approximately 14,000 ves-sels carrying 280 million tons, or 5 percent of the world’s ocean cargo, were being slowed considerably due to tre-mendous vol umes of sea-borne traffic at the Canal.1

Even though officials were running these shipping behe-moths through the Canal around the clock, the delays to shipping companies were overwhelming both in terms of fuel costs and wait times. Along with the immense growth in cargo volumes, the other discernible trend emerging

© Copyright March 2013

2 UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES

Figure 1 Pre- and Post-Expansion Vessels Transiting the Panama Canal

Source: Panama Canal Authority, February 2011 (as presented in http://www.iwr.usace.army.mil/docs/portswaterways/rpt/

June_20_U.S._Port_and_Inland_Waterways_Preparing_for_Post_Panamax_Vessels.pdf)

in the shipping industry was the construction of mas-sive new vessels. Since the opening of the Canal nearly a cen tury ago, the dimensions of cargo ships, naval vessels and passenger ships have been determined by their ability to traverse the Panama Canal. In fact, nautical terminol-ogy was adjusted to refer to a Panamax vessel—a vessel that could be accommodated in the Canal’s 110-foot-wide lock chambers. For nearly 90 years, the vessels that moved most of the world’s trade were able to fit into these lock cham bers. These Panamax vessels had the capacity to carry a maximum load of about 5,000 TEUs, or twen-ty-foot equiva lent units, the nautical term for a standard container.

21st Century Container VesselsA new generation of vessels that exceeds the cur rent ca-pacity of the Canal’s lock chambers has emerged and posed enormous infrastructure challenges, another devel-opment that propelled the expansion effort. For instance, the Mærsk Line’s Gudrun Mærsk has the capacity to carry close to double the capacity of the current class of vessels that transit the pre-expansion Panama Canal.* These in-ordinately large vessels are referred to as Post-Panamax

* Even larger vessels sail the oceans now. For instance, Mærsk Line’s PS-class vessels have the capacity to carry nearly three times the container load of Panamax vessels; the Emma Mærsk is capable of carrying 15,500 TEUs and has an overall length of 1,302 feet, a width of 184 feet and a draft of 51 feet. The Emma Mærsk and her seven sister ships—Ebba Mærsk, Edith Mærsk, Eleonora Mærsk, Elly

Mærsk, Estelle Mærsk, Eugen Mærsk and Evelyn Mærsk—are identical and the wave of the future in the shipping industry. In Novem-ber 2012, the Marco Polo, a container ship owned by the Marseille, France-headquartered CMA CGM group, became the largest con-tainer ship in the world measured by capacity. The Marco Polo can hold 16,020 TEUs.** For the purposes of this article, the term Post-Panamax refers to vessels that can be accommodated in the Panama Canal once the ex-pansion is completed.

vessels and, increasingly, are being deployed to trans port cargo across the globe as manufacturers, distributors, ship-ping companies and other interested parties seek to take advantage of the economies of scale involved with their usage.** Experts estimate these Post-Panamax vessels cur-rently account for 16 percent of the world’s contain er fleet and, more importantly, 45 percent of the capacity of the fleet, a stark reminder of their growing influence in the global shipping industry.

UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES 3

Figure 1 Pre- and Post-Expansion Vessels Transiting the Panama Canal Furthermore, the U.S. Army Corps of Engineers reports these numbers are projected to grow significantly over the next two decades; by 2030, Post-Panamax vessels are ex-pected to constitute 27 percent of the world’s container fleet and 62 percent of its capacity.2 Figure 1 pro vides a graphical representation of the transformation of vessels that will be transiting the Canal after the ex pansion. The new class of Post-Panamax vessels will be 40 percent longer, 64 percent wider and require a 50-foot draft to transit the Canal. “[W)e see a significant interest in using vessels of 10,000 TEUs and up, earlier rather than lat er,” Jorge Quijano, administrator of the Panama Canal Authority, said about the introduction of these Post-Panamax vessels after the expansion. “But we expect to see early deployment of the 8,000- to 10,000-TEU vessels and gradually move up to the 12,000- to 13,000-plus-TEU ships that can fit in the new locks.”3

Power of Economies of ScaleShipping experts and policymakers both within and out-side Panama realized the importance of the expansion effort to accommodate the surging cargo volumes being transported across the oceans by this fleet of supersized ships. In fact, along with Panama’s desire to be an inte gral player in future global trade, another driving force for the current expansion effort was the enormous gains to be re-alized by the power of economies of scale. Entities up and down the supply chain, at every level, realized the consid-erable financial gains—and improvements in opera tional efficiency, productivity and profitability—with the de-ployment of bigger vessels.

Alberto Alemán Zubieta, the former administrator and CEO of the Panama Canal Authority, in a presentation in August 2012, noted two important examples of the lower costs as sociated with Post-Panamax vessels transiting the Panama Canal.4 First, a transshipment of coal between the Port of Baltimore to Xiangang, China, in a Panamax ves-sel (pre-Canal expansion) costs about $35 per ton; the same amount of coal, between the same two cities, in a Post-Pan-amax vessel, would cost approximately $25, $10 less per ton. Second, grain transported to Asia from the Ameri can grain belt would cost about $55 per ton in a Panamax ves-sel, whereas the shipping cost would equal approximately $50 per ton on a Post-Panamax vessel. Alemán said that the “land bridge” option—transported across the United States to a West Coast port from the East Coast—remains the most expensive op tion; in the example of a ton of grain, this transportation mode would cost $95 per ton.

Continuing in that same vein, Quijano, the Panama Canal administrator said, “the new economies of scale and fast-

er passage between the Americas and Asia will not only change maritime routes and cargo logistics, but also will create new markets to exploit the bigger ships and deeper ports.”5 Quijano projected that, as a result of the expan-sion of the Panama Canal, “we’ll see Texas ports shipping more shale gas to Japan, which is moving away from nu-clear power to natural gas. We’ll see East Coast ports—and new sources in Colombia—shipping more coal to China. There will be iron ore from Brazil headed to Asia through the Canal, and on and on.”

Essence of the Panama Canal Expansion ProjectShortly after the 2006 referendum in Panama, work began on the expansion and modernization effort—$5.25 billion at the time of inception.6 In essence, the project involves the construction of two new sets of single-lane locks—one on the Pacific side and another on the Atlantic side of the Canal. The new, concrete lock chambers will be 1,400 feet long, 180 feet wide and 60 feet deep, while each lock com-plex will stretch for more than a mile and a half, creating the largest lift complex in the world.

Each lock will have three chambers and each cham ber will have three water reutilization basins. Despite the abun-dant rainfall in Panama, engineers working on the Canal have been cognizant of the need to conserve water because the Canal’s watershed—the 166-square-mile, man-made Gatun Lake—supplies drinking water to nearly the entire population living in the vicinity of the waterway. Given that nearly 2 billion gallons of water are needed to fill the locks for transiting ships every day, the expansion effort could have required an additional 2 bil lion gallons of wa-ter, an enormous strain on the region’s water resources. In an innovative move based on the locks system on the Elbe River in Germany, however, engi neers working on the Panama Canal expansion devised a unique water re-cycling system with the construction of three new water reutilization basins. These basins cumu latively will se-cure nearly two-thirds of the water from the locks as they empty, which will be recycled and used for the next vessel that travels through the Canal. With the expansion, the new lock chambers not only will retain 65 percent more water than the current locks, but they also will use 7 per-cent less water per transit.

In addition, the expansion project includes two new navigational channels to link the new locks to exist-ing navigational channels, a measure that will result in ex cavating nearly five miles of new channel. The cur-rent navigational route through Gatun Lake also will be deep ened by five feet and widened from the 500-foot

4 UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES

Figure 2 Panama Canal Expansion Effort from Atlantic and Pacific Entrances

Source: Panama Canal Expansion - Diagram of Panama Canal Locks, Popular Mechanics, October 1, 2009.

minimum to 920 feet on straightaways and 1,200 feet on the turns. In addition, Gatun Lake will be elevated and raised one-and-a-half feet, generating an additional 550 million gal lons of water each day for the locks. Upon completion, workers on the expansion project will have dredged 130 million cubic meters—4,591 million cu-bic feet—of rock and soil, or enough rock and soil to fill the Empire State Building nearly 130 times. The expan-sion effort not only will be sufficient to accommodate the largest Post-Panamax vessel, but it also doubles the Canal’s capacity. Fig ure 2 provides a graphical represen-tation of the expansion project from both the Atlantic and Pacific entrances.

Surge in International TradeIntertwined with Panama’s strong support for the expan-sion of the Canal is the me teoric rise in international trade in the past two decades. Experts quickly are realizing that U.S. exports are a bright spark in the otherwise relatively anemic economic recovery. For 15 consecutive quar ters—

between the second quarter of 2009 and the fourth quarter of 2012—U.S. exports have expanded and continued prog-ress is expected in this area, generating jobs and economic opportunities for people across the country. The Ameri-can Association of Port Authorities estimates that every $1 billion in exports generates 15,000 jobs.7 A number of factors have propelled this solid export performance, including the low value of the dollar, which raises the competi tiveness of U.S. products in international markets, and the strategic efforts of U.S. multinational corpora-tions to market items such as aircraft, motor vehicles and petro leum products.

Table 1 documents the progress of U.S. goods exports from 2008 to 2012; the surge in U.S. goods exports since 2010 has been impressive. For the lat est full year avail-able, 2012, U.S. goods exports reached an all-time high of $1.54 trillion, an improvement of 4 percent over the $1.48 trillion secured in 2011. Texas was the nation’s top goods exporter last year and shipped a staggering $265 billion to

Figure 2 Panama Canal Expansion Effort from Atlantic and Pacific Entrances

Source: Panama Canal Expansion - Diagram of Panama Canal Locks, Popular Mechanics, October 1, 2009.

Table 1 2008 - 2012 Total All Merchandise Exports to World (in billions, $USD)State/Jurisdiction 2008 2009 percent 2010 percent 2011 percent 2012 percent

2008 -

2012 %

Alabama 15,879 12,355 -22.2% 15,502 25.5% 17,854 15.2% 19,526 9.4% 23.0%Alaska 3,542 3,270 -7.7% 4,155 27.0% 5,325 28.2% 4,596 -13.7% 29.8%Arizona 19,784 14,023 -29.1% 15,636 11.5% 17,793 13.8% 18,357 3.2% -7.2%Arkansas 5,776 5,267 -8.8% 5,219 -0.9% 5,607 7.4% 7,621 35.9% 31.9%California 144,806 120,080 -17.1% 143,192 19.2% 159,122 11.1% 161,700 1.6% 11.7%Colorado 7,713 5,867 -23.9% 6,727 14.6% 7,332 9.0% 8,164 11.3% 5.8%Connecticut 15,384 13,979 -9.1% 16,056 14.9% 16,212 1.0% 15,866 -2.1% 3.1%Delaware 4,898 4,312 -12.0% 4,966 15.2% 5,510 11.0% 5,157 -6.4% 5.3%Florida 54,238 46,888 -13.6% 55,365 18.1% 64,904 17.2% 66,398 2.3% 22.4%Georgia 27,514 23,743 -13.7% 28,950 21.9% 34,776 20.1% 35,892 3.2% 30.5%Hawaii 960 563 -41.3% 684 21.5% 884 29.2% 726 -17.9% -24.3%Idaho 5,005 3,877 -22.5% 5,157 33.0% 5,905 14.5% 6,113 3.5% 22.1%Illinois 53,677 41,626 -22.5% 50,058 20.3% 64,823 29.5% 68,026 4.9% 26.7%Indiana 26,502 22,907 -13.6% 28,745 25.5% 32,282 12.3% 34,385 6.5% 29.7%Iowa 12,125 9,042 -25.4% 10,880 20.3% 13,307 22.3% 14,604 9.7% 20.4%Kansas 12,514 8,917 -28.7% 9,905 11.1% 11,598 17.1% 11,659 0.5% -6.8%Kentucky 19,121 17,650 -7.7% 19,343 9.6% 20,084 3.8% 22,092 10.0% 15.5%Louisiana 41,908 32,616 -22.2% 41,356 26.8% 54,976 32.9% 63,156 14.9% 50.7%Maine 3,016 2,231 -26.0% 3,164 41.8% 3,421 8.1% 3,058 -10.6% 1.4%Maryland 11,383 9,225 -19.0% 10,163 10.2% 10,852 6.8% 11,781 8.6% 3.5%Massachusetts 28,369 23,593 -16.8% 26,304 11.5% 27,761 5.5% 25,549 -8.0% -9.9%Michigan 45,136 32,655 -27.7% 44,768 37.1% 51,003 13.9% 56,902 11.6% 26.1%Minnesota 19,186 15,532 -19.0% 18,904 21.7% 20,319 7.5% 20,565 1.2% 7.2%Mississippi 7,323 6,316 -13.8% 8,229 30.3% 10,930 32.8% 11,779 7.8% 60.8%Missouri 12,852 9,522 -25.9% 12,926 35.7% 14,154 9.5% 13,910 -1.7% 8.2%Montana 1,395 1,053 -24.5% 1,389 31.8% 1,587 14.3% 1,573 -0.9% 12.8%Nebraska 5,412 4,873 -10.0% 5,820 19.4% 7,582 30.3% 7,449 -1.8% 37.6%Nevada 6,121 5,672 -7.3% 5,912 4.2% 7,978 34.9% 10,190 27.7% 66.5%New Hampshire 3,752 3,061 -18.4% 4,367 42.7% 4,297 -1.6% 3,485 -18.9% -7.1%New Jersey 35,643 27,244 -23.6% 32,154 18.0% 38,115 18.5% 37,035 -2.8% 3.9%New Mexico 2,783 1,270 -54.4% 1,541 21.4% 2,092 35.7% 2,980 42.5% 7.1%New York 81,386 58,743 -27.8% 69,696 18.6% 84,888 21.8% 79,189 -6.7% -2.7%North Carolina 25,091 21,793 -13.1% 24,905 14.3% 27,009 8.4% 28,747 6.4% 14.6%North Dakota 2,772 2,193 -20.9% 2,536 15.7% 3,393 33.8% 4,288 26.4% 54.7%Ohio 45,628 34,104 -25.3% 41,494 21.7% 46,416 11.9% 48,535 4.6% 6.4%Oklahoma 5,077 4,415 -13.0% 5,353 21.3% 6,222 16.2% 6,575 5.7% 29.5%Oregon 19,352 14,907 -23.0% 17,671 18.5% 18,310 3.6% 18,300 -0.1% -5.4%Pennsylvania 34,649 28,381 -18.1% 34,928 23.1% 41,075 17.6% 38,869 -5.4% 12.2%Rhode Island 1,974 1,496 -24.3% 1,949 30.3% 2,282 17.1% 2,376 4.1% 20.3%South Carolina 19,853 16,488 -16.9% 20,329 23.3% 24,697 21.5% 25,247 2.2% 27.2%South Dakota 1,654 1,011 -38.9% 1,259 24.6% 1,460 16.0% 1,550 6.2% -6.3%Tennessee 23,238 20,484 -11.8% 25,943 26.6% 29,993 15.6% 31,125 3.8% 33.9%Texas 192,222 162,995 -15.2% 206,961 27.0% 251,006 21.3% 265,352 5.7% 38.0%Utah 10,306 10,337 0.3% 13,809 33.6% 19,034 37.8% 18,939 -0.5% 83.8%Vermont 3,697 3,219 -12.9% 4,277 32.9% 4,257 -0.5% 4,306 1.2% 16.5%Virginia 18,942 15,052 -20.5% 17,163 14.0% 18,089 5.4% 18,239 0.8% -3.7%Washington 54,498 51,851 -4.9% 53,353 2.9% 64,767 21.4% 75,525 16.6% 38.6%West Virginia 5,643 4,826 -14.5% 6,449 33.6% 9,034 40.1% 11,362 25.8% 101.3%Wisconsin 20,570 16,725 -18.7% 19,790 18.3% 22,055 11.4% 23,097 4.7% 12.3%Wyoming 1,081 926 -14.3% 983 6.2% 1,219 23.9% 1,420 16.6% 31.4%District of Columbia 1,196 1,091 -8.8% 1,501 37.6% 1,039 -30.8% 2,015 94.0% 68.5%Puerto Rico 19,961 20,937 4.9% 22,784 8.8% 18,200 -20.1% 18,663 2.5% -6.5%Virgin Islands 2,747 1,217 -55.7% 1,899 56.0% 2,316 22.0% 870 -62.4% -68.3%Unallocated 42,188 33,620 -20.3% 45,698 35.9% 45,286 -0.9% 51,572 13.9% 22.2%United States 1,287,442 1,056,043 -18.0% 1,278,263 21.0% 1,480,432 15.8% 1,546,455 4.5% 20.1%Source: Office of Trade and Industry Information, Manufacturing and Services, International Trade Administration, U.S. Department of Commerce

6 UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES

all corners of the globe. The Lone Star State’s 2012 export tally clearly cemented its reputation as the nation’s top ex-porter in each of the past five years. New Mexico had the highest rate of goods export growth in the nation in 2012, 42 percent, while Arkansas had the second highest expan-sion rate at 36 percent. New Mexico’s nearly $3 billion in goods exports in 2012 was striking compared to the $2.1 billion achieved in the previous year.

A review of state goods export data over the 2008 to 2012 five-year period, in terms of growth rates, established West Virginia as the national leader. Not only did the Mountain State secure a stunning 101 percent increase in goods exports between 2008 and 2012—$5.6 billion to $11.4 billion—but West Virginia also increased its exports by 26 percent between 2011 and 2012, the fourth highest growth rate in the country. West Virginia was the only state that secured a triple-digit export increase between 2008 and 2012, a further reflection of the state’s strong commitment to export promotion.

Along with U.S. goods exports, the other important cate-gory in total U.S. exports involves services. In a reflection of the growing influence of the service sector in the U.S. economy, a review of services exports in 2012 reflects notable trends as well.* In 2012, services exports totaled $632 billion, an expansion of more than $26 billion from 2011. With regard to U.S. services exports, increases were reached in travel and other private services, which include items such as business, professional and technical services, insurance services and financial services. When U.S. goods and services exports in 2012 are combined, the nation set another export record, soaring to $2.2 trillion and eclips-ing the 2011 combined total by nearly $93 billion.

Global Exports: Projected to IncreaseGiven that future export growth will be critical to take full advantage of the Panama Canal expansion, the fore-cast for the coming years appears to be promising. Myriad economic forecasts related to exports and container ship-ments indicate sustained growth throughout this decade. For instance, an October 2012 report released by the Con-gressional Research Service documents that IHS Global Insight Inc., a leading U.S. economic forecasting firm, pro-jected that U.S. exports will reach $1.5 trillion in 2012,**

$1.6 trillion in 2013 and $1.7 trillion in 2014.8 A report by Global Industry Analysts Inc. in April 2012 forecast-ed that the global market for maritime containerization will reach 731 million TEUs by 2017,9 an impressive in-crease from the 434 million TEUs that transited the top 100 ports in the world in 2010.10 The Global Industry An-alysts report noted that growth in the container market “will be primarily driven by increasing sea trade, devel-opments in shipping networks and transshipment hubs, encouraging investments in port terminal facilities, grow-ing capacity and increased frequency of global maritime freight transport.”

Given the dominant role played by exports in fostering econom ic growth in the past few years, combined with President Obama’s pledge in 2010 to focus on export-led growth and double U.S. exports in five years, there is strong consensus that this segment of the economy will be a thriving one. In response to this expected surge in trade, shipping professionals assert that the largest injection of new ship capacity in the history of container shipping will occur in 2013, with at least 100 vessels with a capacity ex-ceeding 7,500 TEUs being delivered this year alone.11 In fact, by 2015, experts estimate another 700 ships with the capacity to carry more than 7,500 TEUs and above will be in operation. Four major lines each will operate more than 50 ships of this size, with the shipping lines Mærsk and MSC operating more than 100. In addition, MSC is pro-jected to maintain a fleet of more than 50 ships of more than 12,000 TEUs, all clear indications that the shipping industry is preparing for a sizable flow in trade.

Activity at the Atlantic and Gulf Coast PortsCoinciding with the activity in Panama related to the expansion, ports across the Atlantic and Gulf Coasts of the United States have seen considerable action. This ac-tivity stems from the fact that these ports are seeking to secure the additional business, potentially bil lions of dollars, that is expected to flow to the Atlantic and Gulf Coast ports as a result of the expansion of the Canal and continued growth in world trade. Even though most ex-perts are convinced the massive explosion in trade will provide ample opportuni ties for a number of these ports to benefit tremendously, they equally are convinced that these ports need to make essential infrastructure en-hancements to accommodate the larger vessels that will be wending their way to their docks.

A number of factors account for the activity in these At-lantic and Gulf Coast ports. For instance, demographers forecast the U.S. population will increase by 32 percent,

* U.S. services exports, a rapidly growing sector of both exports and the U.S. economy, include such categories as royalties and license fees, travel services and financial services.** With the benefit of hindsight, it is now possible to say that this IHS Global Insight Inc. forecast was accurate. U.S. exports in 2012 were, in fact, $1.5 trillion.

UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES 7

or nearly 100 million people, over the next 30 years, while per capita income is expected to surge by 170 per-cent during the same period.12 The regions expected to experience the highest population growth are the South and West, a development that will gener ate demand for enhanced trade in these regions. In fact, experts calcu-late this drive for increased trade will re sult in imports expanding more than fourfold and exports expanding more than sevenfold by 2030. This growth in trade will heighten the need for the nation’s maritime assets and related multimodal transportation systems to be per-forming at peak capacity, a challenge complicated even further with the onerous infrastructure requirements to accommodate the larger vessels expected through the expanded Panama Canal. Port professionals and trade ex-perts are convinced that exports will continue to play an overwhelmingly influential role in the economic affairs of every state in the country. As Carlos Buqueras, the ex-ecutive director of the Port of Manatee in Florida noted with regard to trade and the role of ports in facilitating this trade: “(T)rade stops, the country stops. It’s crucial we maintain our ports.”13

U.S.—Panama Free Trade Agreement A corollary to this expected growth in global trade, in-cluding a renewed focus in the United States to promote our nation’s exports, is the free trade agreement between the United States and Panama that was signed in to U.S. law on Oct. 21, 2011.14 Panama approved the agreement with the United States in July 2007. The presence of an agree-ment with Panama is an important boost to bilateral trade between Panama and the United States, since it often leads to even further liberalization of trade in goods and servic-es. In the context of the ongoing expansion of the Canal, the path for an even greater movement of cargo is consid-ered a very likely scenario with the free trade agreement. According to the International Trade Administration of the U.S. Department of Commerce, U.S. goods exports to Panama totaled nearly $10 billion in 2012, up more than 20 percent from the $8.2 billion exported to Panama in 2011.15 Between 2005 and 2012, U.S. goods exports to Pan-ama more than quadrupled, growing from $2.2 billion in 2005 to nearly $10 billion in 2012, making Panama the 30th largest export market for the United States in 2012.

Significant Economic Impact of PortsAnother factor contributing to the increased activity at these ports is the competition among them to capture an ever-growing share of the traffic that will be com-ing through the Panama Canal. For a number of years, interested parties have analyzed the tremendous eco-

nomic impact flowing from the nation’s ports. In January 2013, the Alabama State Port Authority released a study confirming the Port of Mobile’s role as a critical econom-ic catalyst for the state and its role in creating jobs and generating tax revenues. The 2011 fiscal year economic impact study estimated $22.3 billion in total economic val-ue for the state from the cargo and vessel activity at the Port of Mobile.16 Also in January 2013, an economic im-pact study of the Port of Brownsville, Texas, documented the port produced $2 billion in economic activity in the state, and that the vessel and cargo activity at the port’s marine cargo facilities and ship repair/oil rig maintenance operations generated 21,590 jobs.17 Of that number, 11,230 jobs directly impact the local and regional economy, while business revenue related to the handling of marine cargo generated an estimated $925 million in local economic im-pacts, according to the report.

Similarly, an April 2012 study released by the Selig Cen-ter for Economic Growth at the University of Georgia’s Terry College of Business documented that Georgia’s deepwater ports supported more than 350,000 full- and part-time jobs across the state, 8.3 percent of total state employment. In other words, one of 12 jobs is in some way dependent on the ports.18 A March 2012 study released jointly by the Ports Association of Louisiana and the Lou-isiana Department of Transportation and De velopment documented that Louisiana’s port system is an enabler and serves as a launch pad for the state’s five major industries—oil and gas, transportation, warehousing, agriculture and manufacturing—all critical parts of the state’s econom-ic base.19 This study documented that nearly 73,000 jobs are created and supported by the 30-plus deepwater and shallow-water ports spread across the state, while the es-timated economic impact of firms providing services to ports and vessels, and firms located at the different ports and port property, amounted to $19.8 billion. In addition, personal earnings totaled $3.96 billion, while state and local government tax collections from port-related activi-ties totaled $517 million per year.

A report by the South Carolina State Ports Authority in October 2011 noted that international trade through South Carolina ports facilitated more than 280,000 jobs across the state in the maritime, transportation, distri-bution and manufacturing industries, while providing an overall economic impact of $45 billion each year.20 Finally, according to a February 2011 study from the North Carolina State University Institute for Trans-portation Research and Education, North Carolina’s ports contributed approximately $7.5 billion to the

8 UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES

state’s economy in relation to goods moving through the state’s ports, supporting more than 65,000 jobs, both directly and indirectly.21 Similar trends are evident at ports across the region.

For the region as a whole, indisputably, a thriving port re-sults in tremendous eco nomic activity that generates a range of positive outcomes. There is sustained interest in the re-gion’s ports to capture as much of the enhanced trade flowing through the Canal as a means to generate additional econom-ic activity, not only around the port, but across the state.

Battle of the Ports: East Coast v. West CoastAlso important in accounting for the infrastructure en-hancements at ports along the Gulf and East Coasts is the strong speculation that the expansion of the Panama Ca-nal will lead to these ports advancing at the expense of the West Coast ports.22 A principal feature of trade statistics relating to U.S. ports in the past two decades has been the increasing dominance of a number of Atlantic Coast and Gulf Coast ports. In anticipation of the expanded Pana-ma Canal, this has be come even more pronounced, with a number of Atlantic Coast and Gulf Coast ports initiating an assortment of specific measures to wrest away a great-er portion of the cargo—pri marily from Asia—delivered to West Coast ports.

The ports of Los Angeles and Long Beach have played an influential role in national cargo trends for decades and, until quite recently, the strategy was to clear the goods off ar riving vessels at these ports and then move the goods by truck and rail to their final destinations across the coun-try. Some 40 per cent of all container cargo traffic into the United States still arrives at these two ports. In recent years, this strategy has undergone a transformation, pre-cipitated by several factors, including labor unrest at the West Coast ports; the move by shipping companies and distributors to explore low er cost alternatives; lack of land for expansion at West Coast ports; and significantly low-er rail capacity at these ports. In fact, the strike threats and eventual strikes at the ports of Long Beach and Los Ange-les in the fall of 2012 put all concerned parties on notice about the potential setbacks to smooth shipping opera-tions as a result of the labor unrest. Consequently, cargo volume arriving at West Coast ports has dropped.

Based on these de velopments, the emerging consensus is that the expansion of the Panama Canal will further the movement away from West Coast ports, especially given the increas ingly larger vessels that will be able to oper-ate through the Canal and call at select Atlantic and Gulf

Coast ports. Conse quently, these ports have seized the opportunity to secure a greater proportion of the cargo volumes entering and departing the United States.23 Not-withstanding this trend, some analysts are less sanguine about this movement away from West Coast ports to ports in the East and Gulf Coasts after the Panama Canal expansion project is completed.24 According to these an-alysts, the Panama Canal expansion actually raises more questions than answers such as whether shippers could gain a viable all-water alternative for transporting prod-ucts from Asia to U.S. Atlantic and Gulf Coast ports and whether there is a boom on the horizon related to this shift. However, these experts maintain that Panama’s development potential as an American distribution hub could be the gamechanger that completely reshapes fu-ture shipping trends.

Obama Administration’s ‘We Can’t Wait’ InitiativeA number of ports on the Atlantic and Gulf Coasts initiat-ed efforts to compete aggressively against each other to secure a greater share of the increase in global trade re-lated to the expansion of the Panama Canal. Some of these ports received a considerable boost in Ju ly 2012, when, as part of the “We Can’t Wait” initiative, the Obama administration announced that seven nationally and regionally significant infrastructure projects will be expe-dited to help modernize and expand five major ports in the United States including—the Port of Jacksonville, Port of Miami, Port of Savannah, Port of New York and New Jersey, and Port of Charleston.25 Four of these five ports are in the Southern region. One of the critical prelimi-nary steps in modernizing and expanding these Southern ports involves finalizing the federal feasibility studies that examine the costs and benefits of deepening their channel depths. While these studies take an av erage of 10 years, the expedited process announced by the Obama administra-tion commits the federal government to finalize the study years ahead of projections. In the instances of the ports of Jacksonville, Miami, New York and New Jersey, and Charleston, the expedited process will enable these ports to reach a channel depth of 50 feet well ahead of schedule (in the case of Charleston, for instance, the study is expect-ed to be complete within three years, considerably earlier than the 10-year average), a critical factor in attracting traffic transiting the expanded Panama Canal. In Febru-ary 2013, officials representing six Florida ports expressed frustration with the pace of the improvements at their ports and pleaded for help from Congress and the Obama administration to push the U.S. Army Corps of Engineers to move faster on port improvements implemented in an-ticipation of the Panama Canal expansion.26

UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES 9

Source: A.P Moeller Mærsk Group, 2011 Service Schedule (as presented in http://www.iwr.usace.army.mil/docs/portswaterways/rpt/June_20_U.S._Port_

and_Inland_Waterways_Preparing_for_Post_Panamax_Vessels.pdf)

Figure 3 Possible Direct Route from Asia to East Coast through the Panama Canal

Atlantic and Gulf Coast Preparations for the Panama Canal Expansion

Ports on the Atlantic and Gulf Coasts are enhancing their infrastructure ca pacities in preparation for the Panama Canal expansion:

» Port of Savannah: The Georgia Ports Authority, which oversees the administration of the Port of Sa vannah and the other ports in the state, embarked on a comprehen-sive effort to both expand and modernize ev ery aspect of the port’s operations. A hallmark of this expansion effort is the Savannah Harbor Expansion Project, a collaboration between federal and state agencies to deepen the Savan-nah River from 42 feet to 48 feet. This is a $652 million deepening project and Governor Nathan Deal’s proposed 2014 fiscal year budget included an additional $50 million, for a total state contribution of $231 million toward the project.27 The governor noted that for every dollar the federal government spends on the project, the nation will see $5.50 in benefits via lowered costs of goods brought to market. The Port of Savannah’s record in recent years has been most impressive, accomplishing strong growth in breakbulk and auto cargoes, alongside record volumes in total tonnage and container traffic.

» Port of Charleston: The South Carolina State Ports Au thority’s major deepwater port is the Port of Charles-ton, another critical port on the East Coast. While North American container port volumes were up 2 percent over-

all in 2012, the Port of Charleston’s volumes grew by 10 percent. In preparation for the Panama Canal expansion and expected routine flow of Post-Panamax vessels, the Port of Charleston has fo cused on its own harbor deepen-ing project. In 2012, this effort was boosted significantly when the General Assembly moved to fully fund the proj-ect’s construction phase by setting aside the entire $300 mil lion estimated cost.28 This allocation not only will cover the state’s 60 percent share, or $180 million of the cost, but it also will fund the federal share of deepen ing the Charleston Harbor to 50 feet or greater—from the current 45 feet—if needed. While the state expects to be reimbursed by the federal government for its $120 million share of the deepening project, the state was propelled in-to action by the need to complete the deepening project by 2018.

» Port of New Orleans: Since it was founded in 1718, New Orleans has been a focal point for global trade. The Port of New Orleans is one of the most significant in the nation, ranking in the top 10 for cargoes ranging from imported steel and natural rubber, to plywood and cof-fee. In preparation for the Panama Ca nal expansion and expected swell of container cargo into Gulf ports, the Port of New Orleans spent $36 million on two new gan-try cranes and a 4.5-acre marshaling yard that expanded its container handling area to 115 acres.29 Port officials estimate an additional $478 million in upgrades—in-cluding improved breakbulk and container terminals, new multipurpose gantry cranes, expanded marshalling

10 UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES

yards and a new road to han dle truck traffic—will be nec-essary to help boost that capability to 1.5 million TEUs per year, up from the current 640,000 TEUs currently handled annually, by the time the Panama Canal expan-sion is completed.

» Port of Virginia: The Virginia Ports Authority, which owns and operates the Port of Virginia, touts its ability to handle the required channel depth of 50 feet to 55 feet—the deepest shipping channels on the U.S. East Coast—and height clearance—approximately 50 feet—of the Post-Panamax vessel class that will be more routine after the expansion.30 The Virginia Ports Authority has been work-ing assiduously for the past six years to prepare for the Canal expansion, including leasing the sizable APMT In-termodal Terminal at Ports mouth, expanding capacity at the Norfolk International Terminal and enhancing in-frastructure capabilities at Craney Island, a $2.2 billion multi-phase terminal project. At the APMT Intermodal Terminal, the port operates eight Post-Panamax cranes, bringing it to a to tal of 22 container cranes that are Pan-amax-class and larger. The Port’s multimodal capabilities, including the double-stack rail lines to Chicago, also remain a major attraction. During the 2013 legislative ses-sion, the General Assembly initiated a bipartisan effort to “restructure the management of the ports while reining in the governor’s ability to lease or sell off operating rights at the state-run terminals.”31

» Port of Brownsville: The Port of Brownsville, the only deepwater port directly on the U.S.-Mexico border, is a critical linchpin in the movement of goods between the United States and Mexico and other global locations. In anticipation of the extra shipping activity and added cargo volumes after the Canal expansion, the Port has in-vested $90 million in infrastructure projects, including multimodal options.32 Eddie Campi rano, port director and CEO, notes that it is imperative the Port of Brownsville moves toward deepening its channel depth from the cur-rent 42-foot draft to 50 feet.“(E)nlarging the channel isn’t a luxury; rather, it is a necessity to take full advantage of grow ing cargo activity in the Gulf in coming years, not to mention the Port’s prime geographical location on the doorstep of Latin America,” he has said.

» Florida Ports: A number of Florida ports have seen a flurry of activity to initiate infrastructure enhancements in preparation for the expansion, a trend underscored by the release of the state’s $9.1 billion transportation bud-get proposal for the 2014 fiscal year in February 2013.33 In fact, a February 2013 news article referenced “an unprece-

dented flood of money” being steered to ports “to get them primed for the Panama Canal expansion.” The proposed budget for the upcoming fiscal year includes $30.6 mil-lion for the Port of Miami, $26.7 million for the Port of Tampa, $19.5 million for the Port of Manatee, and close to $100 million across the rest of the state. “We’re leverag-ing what’s going to happen with the post-Panama Canal expansion. Florida’s truly going to be the gateway to the Americas,” Florida Transportation Secretary Ananth Prasad recently said in testimony before a Florida House Transportation Committee.

Port of Miami : The Port of Miami has focused intense-ly on preparing for the onset of Post-Panamax vessels in multiple ways. One approach is its harbor deep-ening or dredging project. In August 2012, the Port of Miami and the U.S. Army Corps of Engineers signed a construction agreement permitting the Port’s Deep Dredge project to go out for bid. The Deep Dredge

seeks to deepen the Port’s existing 42-foot channels to between 50 and 52 feet. This deepening project is ex-pected to cost about $1 billion and will be completed around the same time as the Panama Canal expansion project. In October 2012, Florida Governor Rick Scott pledged $112 million in state funds to ensure that the Port’s Deep Dredge project remains on schedule.34 Sec-ond, the Port is leading the way in constructing the PortMiami Tunnel, a public-private partnership com-prising the Miami Access Tunnel, Florida Department of Transpor tation, Miami-Dade County and the city of Miami to build two tunnel tubes under Biscayne Bay linking the Port of Miami with the mainland. Ex-perts maintain the tunnel is critical to the Port’s future growth since it will enable traffic to move seamlessly to and from the Interstate system, while significantly reducing traffic in downtown Miami. The PortMiami Tunnel project is expected to cost $1 billion and, while construction began in May 2010, completion is expect-ed by May 2014. The Port of Miami also is working on redeveloping 80 acres of cargo terminal area, a mea-sure that will gener ate greater efficiencies in cargo terminal operations. All these efforts are directed at ensuring that, as one of the closest ports to the Panama Canal, Miami is well-positioned to capture new trade opportunities and help transform Florida into a glob-al logistics hub.

Port Everglades: Port Everglades in Broward County al-so is working toward infrastructure improvements in preparation for the Canal’s expansion.35 In addition to the construction of five new berths to accommodate the in-

UPDATE: THE PANAMA CANAL EXPANSION AND SLC STATES 11

creased cargo traffic, the Port intends to widen and deepen channel depth to 50 feet as well as enhance freight rail capa-bilities. A Port Everglades official noted that even though “the Port already handles Post-Panamax ships, they must be lightly loaded, which is inefficient and drives carriers away to other ports.” Hence, Port Everglades officials are focused on implementing a range of infrastructure en-hancements to remain competitive with seaports in the Southeastern area of the United States.

» Port of Wilmington: The North Carolina State Ports Authority operates a number of facilities, in cluding the Port of Wilmington, Port of Morehead City, and inland terminals in Charlotte and the Piedmont Triad at Greens-boro. In January 2012, the Ports Authority announced it had renewed its strategic alliance with the Panama Canal Authority with the sign ing of a memorandum of under-standing. This memorandum reaffirmed both entities’ dedication to generating new business and promoting an all-water-route. As Carl J. Stewart, Jr., the chairman of the North Carolina State Ports Authority Board of Directors in January 2012 noted, “two-thirds of the cargo handled at North Carolina’s ports transits through the Panama Canal and we look forward to the next five years of our renewed partnership, espe cially the eagerly anticipated completion of the Panama Canal expansion.”36

» Port of Houston: In March 2012, the Port of Houston announced the introduction of a new all-water service connecting Asia and Houston via the Panama Canal. Ves-sels from COSCO Container Lines Americas will travel between Shanghai and Houston—transiting the Ca nal—in what has been termed the Gulf of Mexico Express service.37 The Gulf of Mexico Express becomes the first direct contain er liner service from China to call at the Port of Houston in nearly 10 years and is a strong indica-tion of the thriv ing shipping activity forecasted between Asia and the Gulf Coast, via the Canal, in coming years. To prepare for the inflow of larger vessels and increased cargo resulting after the expansion, along with the ex-pected future population growth in the region, the Port of Houston has a strategic plan to use its natural advantages and enhance its capac ities. These plans include building first-class container facilities at both the Bayport Ter-minal and the Barbours Cut Terminal; rejuvenating the Port’s general cargo facilities and busi ness practices while efficiently accommodating a diverse cargo portfolio; maintaining and improving the Port of Houston’s ship channel—currently at 45 feet deep and 530 feet wide—and its tributaries to meet current and fu ture navigation needs; leveraging the local and regional transportation

systems and expanding the footprint of the Port’s logis-tics links, including roads, rail and barges; heightening the value and function of the Port’s varied real estate assets; and optimizing the Port’s financial po sition in re-sponse to marketplace and business demands. In terms of financial outlays for these projects, in 2013, the Port will seek approval for $220 million in capital improvement projects, of which approximately $142 million will be al-located to the Port’s container terminals for continuing development of Bayport and modernization at Barbours Cut.38 In addition, about $9 million will be reserved for maintenance dredging and related improvements, with the remaining 2013 capital budget deployed for projects at the general cargo and bulk terminals in the Turning Basin area and port security.

ConclusionExperts are optimistic that the U.S. exports market will continue its current growth and increase substantially in the coming years once the economic situation in Eu-rope and Asia stabilizes and improves. U.S. global trade is projected to flourish in the coming years with the com-pletion of the Panama Canal expansion, a critical link in the transportation of goods to and from the United States, playing a dominant role in promoting these trade links. The potential for additional cargo being ferried to Atlan-tic and Gulf Coast ports and away from West Coast ports has resulted in a flurry of activity in a number of South-ern ports as they prepare for both the ex pansion in cargo volume and vessel size. Port officials and policymakers do not view the cargo expected to arrive at Atlantic and Gulf Coast ports as a zero-sum game and are confident that the increase in cargo volumes with the Panama Canal expan-sion will be substantial. In turn, this increase will provide incredible opportunities for a number of ports.

Policymakers at every level of government re alize the tremendous economic prospects, not only in the manu-facturing of export items, but also in the activities of the ports and related multimodal transportation solu tions. As a result, important infrastructure enhancements are un-derway in a number of Southern ports given the in creased anticipation that an even greater portion of future U.S. ex-ports and imports will transit through a Southern port. In fact, it is impressive that policymakers at ev ery level of government—federal, state and local—along with part-ners in the private sector, are working collaborative ly to initiate infrastructure improvements at the region’s ports that not only prepare for the onset of Post-Panamax ves-sels, but also will enhance the economic po tential of their individual cities, states and beyond.

THE SOUTHERN OFFICE OF THE COUNCIL OF STATE GOVERNMENTSPO Box 98129 | Atlanta, Georgia 30359

ph: 404/633-1866 | fx: 404/633-4896 | www.slcatlanta.orgSERVING THE SOUTH

Endnotes1. “The Canal Gets Bigger, and U.S. Ports are Ready,” Business Facilities, April 1, 2011.2. “U.S. Port and Inland Waterways Modernization: Preparing for Post-Panamax Vessels,” U.S. Army Corps of Engineers, Institute for Water Re-

sources (IWR), June 20, 2012.3. “Quijano Prepares for New Job as Panama Canal Authority Administrator,” The Journal of Commerce, May 28, 2012.4. Presentation by Mr. Alemán Zubieta, Alberto, former administrator and CEO of the Panama Canal Authority at the Southern Governors’ Asso-

ciation Annual Meeting, August 10, 2012.5. “Expanded Panama Canal Sparks Race To Be Ready For Bigger Cargo Ships,” The Washington Post, January 12, 2013.6. Information related to the technical specifications of the Panama Canal expansion is extracted from: Reagan, Brad. “The Panama Canal’s Ulti-

mate Upgrade,” Popular Mechanics, October 2009.7. Nagle, Kurt, President and CEO, American Association of Port Authorities (AAPA), “Freight Policy Across All Modes,” November 15, 2012,

http://www.waterwayscouncil.org/Presentations/2012FallSymposium/Nagle.pdf.8. “U.S. International Trade: Trends and Forecasts,” Congressional Research Service, October 19, 2012.9. “Maritime Containerization: A Global Strategic Business Report,” Global Industry Analysts, Inc., April 9, 2012.10. “World Port Rankings (2010),” American Association of Port Authorities, http://www.aapa-ports.org/Industry/content.cfm?ItemNumber=900&navIt

emNumber=551.11. Newsome, James I. III, President and CEO, South Carolina Ports Authority, “State of the Port 2012,” October 25, 2012, http://www.scspa.com/2012_

State_of_the_Port_Address.pdf. 12. “U.S. Port and Inland Waterways Modernization: Preparing for Post-Panamax Vessels,” ibid.13. “Florida Port Officials, Lawmakers Blame Corps of Engineers for Delayed Improvements,” The [San Luis Obispo, California] Tribune, February

14, 2013.14. “U.S.- Panama Trade Promotion Agreement,” The Office of the U.S. Trade Representative (USTR), Washington, D.C., http://www.ustr.gov/

trade-agreements/free-trade-agreements/panama-tpa.15. U.S. exports to Panama in 2012, http://tse.export.gov/TSE/TSEhome.aspx.

16. “Port Authority “Economic Catalyst” For Alabama New Study Affirms Jobs and Tax Impacts,” News Release, Alabama State Ports Authority, Jan-uary 17, 2013, http://www.asdd.com/pdf/011713_ASPA_Economic_Catalyst.pdf.

17. “Port of Brownsville Report Comes Ahead of Legislative Visit,” The [Rio Grande Valley, Texas] Monitor, January 23, 2013. 18. http://www.terry.uga.edu/selig/docs/ga_ports_study_2011.pdf

19. Richardson, Dr. James A., ‘The Economic Impact of the Ports of Louisiana Prepared for the Ports Association of Louisiana,’ March 2012, http://

www.portsb.com/documents/2012%20Final%20Report.pdf. 20. “Fact Sheet,” News Release, South Carolina State Ports Authority, October 12, 2011, http://www.port-of-charleston.com/About/statistics/FACT_

SHEET_FY11.pdf.21. “Economic Contribution of the North Carolina Ports,” North Carolina State Ports Authority, February 9, 2011, http://www.ncports.com/elements/

old/userfiles/Economic%20Contribution%20Final%20Report%20ITRE.pdf.22. For a more expansive description of this trend, see CanagaRetna, Sujit M., “The Panama Canal Expansion and SLC State Ports,” Special Series

Report of The Council of State Governments’ Southern Office, the Southern Legislative Conference, June 2010, pages 8-16.23. This potential trend has been highlighted in other publications as well. See “Eastern Port Traffic Growth Will Accelerate,” North American Port

Analysis, August 2012, http://www.colliers.com/en-us/~/media/files/marketresearch/unitedstates/colliers_portreport_2012q2_final.ashx. 24. O’Reilly, Joseph, “Panama Canal: More Questions Than Answers,” Inbound Logistics, November 2012.25. “We Can’t Wait: Obama Administration Announces 5 Major Port Projects to Be Expedited,” Office of the Press Secretary – The White House,

July 19, 2012, www.whitehouse.gov.26. “Florida Port Officials,” The [San Luis Obispo, California] Tribune.27. “Focus on Foundations that Strengthen Georgia,” Governor Nathan Deal’s 2013 State of the State Address, January 17, 2013, http://gov.georgia.

gov/press-releases/2013-01-17/deal-focus-foundations-strengthen-georgia. 28. Newsome, “State of the Port 2012.” 29. “Port of New Orleans Declares It’s Ready for More Panama Canal Cargo,” New Orleans City Business, October 9, 2012.30. “The Canal Gets Bigger, and U.S. Ports are Ready,” Business Facilities.31. “Dueling Bills Aim to Restructure State Ports,” The [Hampton Roads, Virginia] Daily Press, January 15, 2013.32. “The Canal Gets Bigger, and U.S. Ports are Ready,” Business Facilities.33. “More State Spending On Roads, Ports,” The Miami Herald, February 19, 2013.34. “Florida’s Ports Positioned For Panama Canal Expansion,” Logistics Management, October 19, 2012, http://www.logisticsmgmt.com/article/

floridas_ports_positioned_for_panama_Canal_expansion/.35. Ibid.36. “Panama Canal Authority and NC State Ports Authority Renew Partnership,” Press Release, North Carolina State Ports Authority, Januray 26,

2012, http://www.ncports.com/news/news-releases/panama-Canal-authority-and-nc-state-ports-authority-renew-partnership/.37. Edmonds, James T., Chairman, Houston Port Commission, 2012 State of the Port to the Greater Houston Partnership, October 31, 2012, http://

www.portofhouston.com/static/gen/about-us/State_of_the_port/PHA-SOTP-transcript-2012.pdf. 38. Capital Improvement Projects, Port of Houston, http://www.portofhouston.com/business-development/capital-improvement-projects/.