Panama Canal at Crossroads

The Wall Street Journal ^ | Wednesday, January 7, 2004 | NEIL KING JR.

[presidio9]

How many Chinese bras -- and televisions and Barbie dolls and VCRs -- can fit through the Panama Canal?

It's a question bedeviling canal authorities and many huge U.S. retailers who are betting on the waterway to get goods from Asia to the East Coast. Booming Chinese exports, and the increasing popularity of the all-water route from Asia to the Atlantic seaboard, made 2003 the busiest and most profitable year in the canal's 90-year history.

[Eric in the Ozarks]

Great Lakes (the Upper Lakes) max is 1000 X 105 feet wide but they can't get past the Welland Canal which is 730 X 75.

[Alamo-Girl]

Thanks for the ping!

[Paul Ross]

China runs the Panama Canal, hence, they have something of an economic stake in promoting its use over the Suez Canal.

[DarkWaters]

China runs the Panama Canal, hence, they have something of an economic stake in promoting its use over the Suez Canal.

Much of which is no doubt planned for future military use. Maybe for even squeezing a carrier through if done right. As I understand it, our carriers can't fit through here.

A side note, Li Ka-shing's son is looking to buy a bankrupt Canadian airline. China just continues to march on and on.

[Alberta's Child]

FWIW, there is some speculation that the newest generation of container ships (as well as any larger ones planned for the future) may be obsolete before they are put in service. They may never be utilized to the extent it was expected.

[taxcontrol]

About 50% longer than the existing canal. Yes, far more expensive than the original but if done that way, it would be able to cut the operational costs as well.

[harpseal]

The simple fact the PRC now controls the canal makes any expansion of its capacity a militarily significant issue as well as an economic issue.

[Jeff Head]

They would increase its size now for economic reasons and later perhaps for military use...but the real military use for them would come when they deny it to us. Either by defending it or destroying it, to impede our movement of troops and materiel across the Pacific.

[stationkeeper]

Not sure what you mean by obsolete...........the problem with container ships of this size is not the panama canal since they don't use it anyway.
The biggest constraint on the largest container ships today is draft (water depth)...there is not a single East Coast USA port that can handle them at their max design draft, which requires about 52' of water depth....
they can hit southern california, most of the major line haul ports in europe and asia but not the U.S. East Coast.
this constraint drives all sorts of deployment and load factor decisions for the Carriers that operate these ships....that is why they are beating up all the major East Coast ports (N.Y/HAMPTON ROADS/CHARLESTON) to fix the problem through dredging to the required depths.....which is wildly expensive and has to clear a bunch of Environmental hurdles.

[pepsionice]

The real bottom line here...is that the canal is more than adequate for most ships used today. The super-vessels, which alot of companies dream of...aren't really required. As for the $8 billion figure...I doubt seriously that it would be enough. The real figure is probably in the $40-60 billion range. The corruption factor alone in Panama would add up to $5 billion during the contruction phase.

[Alberta's Child]

It's more of a "functional obsolescence" than anything else. Ocean-going carriers responded to the growing Asia-U.S. container trade by building larger ships to gain competitive pricing advantages through economies of scale, but many shippers have begun complaining that this has resulted in a scaling back in the number of ships making port calls for them.

The airline industry offers an interesting parallel. As passenger loads increase between two points, the airline industry does not respond by operating these routes with larger aircraft, but by offering more frequent service with the same type of aircraft.

In essence, the shippers are willing to pay slightly more with a carrier that uses two 3500-TEU ships per week than with a carrier than runs a single 7000-TEU ship per week.

[stationkeeper]

Shippers aren't willing to pay more for diddly.....
i agree they like frequency and port coverage but they could care not a whit if the ship was 3500 teu or 35,000 teu so long as the price was right and the goods got to their buyer within the time specified.

[Alberta's Child]

A shipper is certainly willing to pay more for frequent service if it helps reduce his warehousing requirements at either end.

[stationkeeper]

okaaay.....my sales guys will be contacting you for help......try as they might, they have yet to figure out a strategy that pursuades Wal-Mart/Home-Depot/Nike/Big Three in Detroit/Toyota/Honda/Lowes, etc., etc., etc., that they should pay a rate premium for increased frequency (which is already essentially a sailing a day) which might translate into a net of one less dwell day in their respective distribution centers.

[j_accuse]

Posted on 01/07/2004 9:54:44 AM PST by presidio9 How many Chinese bras -- and televisions and Barbie dolls and VCRs -- can fit through the Panama Canal?

As many as Wal Mart can ship through the Canal, and as many as Wal Mart shoppers in Suburbia USA are willing to buy!

Wal-Mart in China (Wal-Mart and Chicoms find common ground?)

Chinese bases are also set up in Atlanta, Baltimore, Charleston, Houston, Long Beach, Los Angeles, Houston, San Francisco, Seattle, Secaucus, Toronto, Vancouver

[GOP_1900AD]

Sadly, many of our own business interests consider this sucking sound to be a good thing. The siren song of China has bitten them on their collective rear ends, and now they are infected with the bug which I'll characterize with a quote from that wonder of intellect, Tom Peters: "It's Asia stupid." Naturally, it is indeed Asia, in particular the PRC building up nuclear rocket forces, while just to the North, the CIS makes its own preparations. Oh, but how dare I point out such anachronistic signs of war, for after all, the infallible Francis Fukuyama, some years ago, assured us that with the fall of the Berlin Wall, history had ended and a milleneum of Pax Occidentalum, assured not by armies, but by armies of MBAs, was assured. [Melt the bombs, melt the bombs, melt the bombs, and never more to drop them, melt the bombs, melt the bombs, and never more desire them...]. Meanwhile, nary a Russian refutation has been made to A. S. Milovidov's barb regarding the naivete of Westerners concerning the utility of Wars of Mass Destruction for meeting one's goals of world conquest. And, in lock step, PLA generals have only further distilled their ideas regarding assymetrical means of defeating the West. Oh, but so sorry, there I go again, trying to hate the Eastern Bloc back into existence.... bad Clausewitzian, bad Clausewitzian.

[WoofDog123]

"The simple fact the PRC now controls the canal makes any expansion of its capacity a militarily significant issue as well as an economic issue.
"

Could you please come down here (panama) and show me the PRC 'controlling' the panama canal?

There are a lot of chinese here and things associated, but they don't control any canal. This is one of the more obnoxious urban myths that has sprung from H-W corruptly buying the balboa and cristobal port concession.

With modern military tech, the canal is not a controllable or defendible asset.

[WoofDog123]

"They would increase its size now for economic reasons and later perhaps for military use...but the real military use for them would come when they deny it to us. Either by defending it or destroying it, to impede our movement of troops and materiel across the Pacific."

It doesnt't matter how many troops the US (there are some now) or PRC have in china with regard to operation of the canal. It cannot be defended. The US could still have 40k men here ad it could be easily rendered inoperative by a competent military power or paramilitary entity.

[Tribune7]

A cheaper, more effective means would be to bust the unions that screw up our West Coast ports.

Actually, an improved canel might do that.

[Jeff Head]

The canal could be defended by the US...we have the technological capability presuming we had the control of enough land, air and sea space around it. We could have pressed for that.

Instead, we have chosen not to, and in fact have gone the other way.

As a result, others, particularly the Chinese, are in a position now to militarily hurt us by denying it to us. That is all.