Once the Panama Canal expansion is complete, the larger route will quickly regain market share that had been ceded to the Suez Canal because larger ships couldn’t navigate the Panamanian channel, according to Curtis Foltz, executive director of the Georgia Ports Authority.
In a presentation during the Georgia Foreign Trade Conference on Tuesday, Foltz said when the expanded Panama Canal opens, cargo from Hong Kong and areas north of the city will shift back to using the Panama Canal.
“We believe that freight very quickly goes back to its natural service area, which is the Panama Canal,” he said. “We think there will be incremental growth just because of the competitiveness that the larger ships provide.”
This shift will be gradual and while cargo growth will occur for the East Coast ports, Foltz said, he’s not of the opinion that a tsunami of freight is coming that will “destroy us all,” which is what some port authorities have been alleging, he said.
As for the future of the Suez Canal, Foltz said it will revert to being a southeast-Asia centric service and business from Hong Kong and Central China will evaporate. This isn’t to say the Suez will go out of favor. Currently, Savannah is the only port on the East Coast that is called by all 11 services that pass through the Suez, Foltz added.
“We do think the Suez is here to stay and the Suez routes to the East Coast — it’s almost amazing how much growth has occurred there over the last 10 years,” he told attendees. “They’re taking advantage of the multiple markets they can serve coming to the east coast. The Suez trades will continue to grow.”
To handle this increase of activity, wherever it comes from, East Coast ports need to continue to invest in infrastructure, he said. Ports in the Southeast will also face activity from the large population growth expected to hit the region in the coming years.
"That's why the Southeast needs its ports, not individual terminals, but its port system to continue to grow. We need to have capacity in Charleston, we need capacity in Savannah, we need capacity in Jacksonville," he said. "Southeast demographic growth, both on the manufacturing side and the consumer side, is going to require all the port capacity that we can possibly build in the Southeast to service this continued growth."