Port wars heat up as East Coast raises the bar

A cargo ship is seen passing through the Miraflores Locks in the Panama Canal on April 15, 2012.

Vice President Joe Biden will hopscotch from one port to the next on Monday as he makes the case for more investment in infrastructure projects. First stop will be the port in Charleston, South Carolina, followed by a trip down to the port of Savannah.

Ports are debating whether to upgrade facilities in order to handle the next generation of cargo ships. And that could make the difference as ports compete to lure the most traffic.

Consider the port in Charleston. It dates back to 1670. But it’s not designed to handle the most modern ships.

“Container ships are getting very big. In fact, by the time the Panama Canal is expanded in 2015, over 50 percent of the world container-ship fleet capacity will be bigger than can go through the Panama Canal today,” says Jim Newsome, president of the South Carolina Ports Authority.

Newsome would like state and federal authorities to invest money to deepen Charleston’s port.

“It’s really a good value for the money. It’s a $300-million project,” says Newsome.

He says proposals to deepen rival ports on the East Coast would cost twice as much.

But some question whether all ports should go to the expense.

“Rather than spend an extraordinary amount of money trying to deepen every single port on the East Coast, maybe you pick some winners and losers,” says Paul Bingham, an economic consultant with CDM Smith who is involved with a campaign to promote the ports in Southern California.

But he acknowledges that East Coast ports have some advantages. For example, much of the country’s population lives in the east. That could influence future shipping trends.

“The lower costs of keeping the goods on the water [for] a longer period of time is potentially a threat to the West Coast ports’ business” says Bingham.

To move a computer from China to Charleston, it’s still faster to unload the computer at a West Coast port and transport it over land. But if a merchant can afford to wait, shipping that computer is cheapest when it travels by water.

About the author

Jeff Tyler is a reporter for Marketplace’s Los Angeles bureau, where he reports on issues related to immigration and Latin America.

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