Panama plan's impact

An increase in container ship traffic as a result of the widening of the Panama Canal could have an impact on the local industrial and warehouse sector.

An increase in container ship traffic as a result of the widening of the Panama Canal could have an impact on the local industrial and warehouse sector.

More storage space for inbound goods will be needed as distribution networks grow.

The shipping capacity of the canal will be doubled by the widening, which is now under way and scheduled for completion in 2015.

The 77.1-kilometre Panama Canal, which connects the Atlantic Ocean via the Caribbean Sea to the Pacific Ocean in Central America's Panama, now has two 33.5-metre wide channels of locks. A third, wider lane of locks is being built.

Supersized cargo carriers are expected to use the wider Panama Canal as a more direct route from European and American east coast ports to Pacific markets.

These super ships are the A380s of the sea and while analysts argue container-ship supply is ahead of demand, the manufacturers are building them as fast as possible.

This year, the container-ship industry will add about 1.5 million 20-foot equivalent units (TEUs) - a 10 per cent increase on 2012 container movements.

The real estate and infrastructure sectors say these giants of the sea will bring improved efficiencies in transport and distribution hubs.

According to Jones Lang LaSalle research, this new generation of transport, including Maersk Line's Triple-E vessels, will drive a review of selected destinations and transport nodes, which will affect global and local freight patterns.

Maersk Line's $190 million Triple-E class is the largest ship in the world, at 400 metres in length and able to carry 18,000 TEUs. By comparison, current classes of mega-carriers are about 350 metres long and carry less than 8000 TEUs.

With the first Triple-E scheduled for launch in July, Maersk is forecasting global trade growth of between 2 and 4 per cent. The US National Oceanic and Atmospheric Administration says 90 per cent of international trade (by weight) will be carried by sea by 2020.

The Chicago-based managing director for the global supply chain and logistics solutions team at Jones Lang LaSalle, Rich Thompson, said the expansion of the Panama Canal reflected the growth and evolution in the global movement of goods and materials by shipping container.

"In a world of ever-increasing transportation costs, more demanding customer service requirements and increasingly important sustainability issues, we expect these operational considerations to have an impact on industrial real estate as companies need to re-evaluate their supply chain networks," Mr Thompson said.

"The expansion of the canal has already sparked competition for port market-share and the need for capital investment in projects like channel dredging to accommodate larger ships with deeper drafts, but it also has the potential to shift the flow of goods as they are moved throughout the US."

The national director of corporate industrial solutions at Jones Lang LaSalle, Andrew Maher, said those in the Australian industrial sector are now demanding greater efficiencies from their real estate, together with reduced transport costs and the seamless co-ordination of logistics.

In Sydney, Port Botany is receiving a major expansion, catering for long-term trade growth - one of the largest port projects in Australia in the past 30 years.

"The new third terminal at Port Botany will have five additional berths and improvements at the Patrick Port Botany terminal will almost double the capacity there for automation and increased stacking," Mr Maher said.

Related Articles