Tag Archives: panama canal

Panama Canal Administrator Jorge Quijano visited PortMiami, which is also betting big on the canal expansion

Panama Canal expansion completion expected in May, Varela says

The Panama Canal’s massive, multi-year expansion project is expected to be completed “around the month of May,” Panama’s President Juan Carlos Varela said in a speech over the weekend.

In a national address, Varela also made an appeal for the consortium leading the project to “leave legal disputes in the hands of the competent authorities” so that the project can be completed, according to news reports. The legal disputes have helped delay the project’s completion.

The consortium, Grupo Unidos por el Canal de Panama, began the project in 2007. Since then, the project has fallen well behind schedule. An October 2014 deadline was postponed to April 2016; Varela’s speech indicates that deadline has been pushed back to mid-May, according to news reports.

In December, the Panama Canal Authority announced that the expansion is 96 percent completed. Locks reinforcements are scheduled to be completed in mid-January, and in April, transit trial tests with a chartered vessel in the Atlantic locks will occur.

A date for the expanded canal’s inauguration is expected to be in second-quarter 2016, according to the authority.

North American Railroads: Consolidation in 2014 and Beyond?

Image

Canadian Pacific Railway CEO and Director E. Hunter Harrison told investors last week that he expects rail consolidation among the largest North American railroads within six years, but his ideas are more than just the usual rumors. One of which is that Kansas City Southern Railway, the smallest of the major railroads, will merge with one of the five other Class I carriers or a third-party that merges two railroads. The major benefit to a KCS buyer would be gaining the only cross-border rail network that connects the U.S. to Mexico’s rapidly growing manufacturing base.

What if each of the western U.S.-based Class I railroads — BNSF Railway and Union Pacific Railroad merge with an eastern counterpart. BNSF or UP, for example, could merge with CSX Transportation or Norfolk Southern Railway. Such a merger wouldn’t “impact the competitive environment,” and shippers would gain better service by having two transcontinental lines. Shippers with access to only one line, who refer to themselves as “captive shippers,” could benefit as well.

Under a dual transcontinental merger scenario, the need for handoffs at the Mississippi River or in Chicago would be reduced, speeding up transit times. The mergers also would reduce corporate costs, because two sets of management would be redundant, and some railyards could be consolidated.

Traditionally, Chicago was the Rail Capital of the United States. Will new Chicago Bypasses develop? What about companies like UPS who rely on Chicago traffic? Union Pacific was created by Abraham Lincoln and Congress to “span the Continent”.Will this happen? A transcontinental merger wouldn’t create major cost savings, nor would it greatly improve service, because interline traffic generally runs smoothly.. Railroads’ differing cultures would only complicate a process. I remember when CSX had just taken over the Selkirk Yard near Albany. There was a blizzard and Selkirk shut down. CSX sent a team of executives to solve the problem. They arrived at the Albany County Airport (built in the 1930’s and not shut because they used strange contraptions called snow plows. These characters arrived in raincoats and rubbers and carrying umbrellas.

The most likely consolidation scenario is a merger or acquisition involving KCS, but the railroad’s high valuation likely is keeping suitors at bay. Acquiring or merging with KCS seven or eight years ago before the railroad’s cross-border business began to take off would have made sense.

The greatest potential for rail consolidation isn’t in the Class I industry but within the small lines that connect to the major railroads. Let’s start with Florida East Coast Railway. Not likely. They are gearing up for the Panama Canal expansion plus their parent company is building a Miami to Orlando passenger train. Just announced purchase of 24 new GE locomotives (see picture at top) .

Genesee & Wyoming, an owner and operator of short lines and regional freight railroads, is best poised to swallow up other lines because the company has access to some $400 million in capital and is the largest strategic player, according to a Stephens research note. Of the 459 privately owned U.S. regional and short lines, which make up about 80 percent of the market, G&W’s network connects with 48 of the lines. Like the larger railroads, many of G&W lines, which total 98 in North America, are seeing intermodal traffic growth.

See more about railroad mergers over history.

 

Pearl Harbor Day In Florida

Below is a really great guest article by Pete Geiger in the Clay Today Online

Would we make the same mistake today? Chances are we will do so.

Flagler was mesmerized, it would seem, by the impending completion of the Panama Canal in the early 20th Century. He persuaded himself that inter-ocean steamship traffic transiting the new canal would have to stop in Key West to take on coal and to offload shipments bound for the U.S. Southeast.

So Flagler did the impossible. He spent himself nearly dry to push his Florida East Coast Railway from Miami across the Keys in anticipation of new riches to be made in haulage to-and-from the canal traffic.

Now Flagler’s Folly is about to be repeated.

The Panama Canal Authority will open in late 2015 or early 2016 new, larger locks on the Pacific Ocean and Caribbean Sea. I watched work last week on the northern locks and I thought about good ol’ Henry.

Oh, the locks will allow larger ships to transit the canal, alright. Just as the original Panama Canal, completed 100 years ago this year, spared shipping many days of sailing and dangerous storms around Cape Horn at the tip of South America.

It’s just that, by the time the canal and Flagler’s “overseas railway” were finished, improved efficiency in steamships meant they had no need to stop at Key West to take on coal. It was far more profitable to continue past Florida and up the East Coast to harbors nearer to their markets.

By the time it was destroyed by a hurricane in 1935, Flagler’s railroad was already in receivership.

Now Flagler’s figurative successors in the U.S. Army Corps of Engineers and local Chambers of Commerce are being mesmerized anew by the promise of the Panama Canal’s larger locks. They’re blowing their horns and beating their drums for deepening of the St. Johns River channel from 40 to 47 feet for 13 miles from Mayport to Jacksonville to accommodate the deeper-draft ships transiting the new Panama locks.

The massive cost of such a project – and no one can say how much it would be – will be offset by the increase in shipping through Jacksonville’s railroad connections. The project will mean thousands of new jobs, they say, but no one can say how many thousands nor how long the jobs might last.

Nor can anyone explain why shippers might prefer to unload cargo from low-cost container ships onto higher-cost rail cars for travel to their destinations. The shippers gave their answer to Henry Flagler a century ago – better to sail northward and unload where the rail transport would be cheaper.

It should be noted that the Corps of Engineers seeks no return on investment. It’s mission is to build dams and dig channels.

In order to pursue the channel-deepening scheme, the Corps would employ dynamite to remove the natural rock bed of the St. Johns. The U.S. Fish and Wildlife Service and the St. Johns Riverkeeper have both pointed out that such alteration would result in partial draining of the wetlands lying adjacent to the river’s estuary and would impact the area’s fishing industry dramatically. It would also introduce brackish water farther upstream, beyond Clay County.

The massive changes to the river could not be undone if the project proved to be misguided.

In the case of Flagler’s “overseas railway,” the bridges from key to key were repurposed and a highway was built on the old railroad right-of-way. The bridges have since been replaced, but the highway still occupies Flagler’s Folly.

In the case of a deepened but useless St. Johns channel, there would be no repurposing possible. So I went down to Panama to observe the canal’s centenary and I thought about ol’ Henry Flagler. Would he make the same mistake again? Will we?

AllAboardFloridaColoredTrain

In other Florida rail news: Environmental study of All Aboard Florida project draws 8,000 comments

Find out about PROMISES and PROMISES

 

What Will the Panama Canal Do For Florida East Coast Railway?

Image

The 48 mile-long international waterway known as the Panama Canal allows ships to pass between the Atlantic Ocean and Pacific Ocean, saving about 8,000 miles from a journey around the southern tip of South America. A project is underway to build new locks as well as wider and deeper channels that is expected to double the canal’s capacity. This will allow megaships to move through the Canal.

Though traffic continues to increase through the canal, many oil supertankers, huge container ships and aircraft carriers can not fit through the canal. There’s even a class of ships known as “Panamax,” those built to the maximum capacity of the Panama canal and its locks. the Panama Canal expansion project will allow ships double the size of current Panamax (“Post-Panamax”) to pass through the canal, dramatically increasing the amount of goods that can pass through the canal.

The expansion project is a little off target and will not be completed until April 2015. What does this expansion mean? The Panama Canal will then accommodate post-Panamax vessels that carry 12,600 containers, compared to today’s ships carrying 4,500 containers.

Shipping containers through the Canal on these larger ships could reduce costs by as much as $75 to $100 per container per voyage, which adds up quickly! When such ships are able to pass through the Panama Canal, business will consequently pick up along both the U.S. Eastern and Gulf coast ports because the ships can take an “all-water” route from Asia to the U.S. East or Gulf coast—bypassing West coast ports and the roads and railways now used to transport goods across the U.S. However, these ships require depths of up to 50 feet of water to navigate. As a result, port authorities along the U.S. Eastern seaboard and Gulf coast are spending hundreds of millions of dollars to dredge the bottoms of their bays and river bottoms to deepen harbors to accommodate the larger ships.

Progressive Railroading has been covering the East Coast ports plus the connecting railroads. As the $5.25 billion Panama Canal expansion nears its 2015 completion to allow supersize, Post-Panamax cargo ships to pass through on their way to markets farther north, eastern U.S. ports and a number of railroads are gearing up for an anticipated increase in international intermodal traffic in the coming years. East and Gulf Coast port authorities are developing and deepening their harbors in preparation for the influx of giant ships, and eastern railroads are building or expanding on-dock rail facilities, building intermodal centers or advancing other plans to accommodate an expected increase in freight traffic.

Among railroads anticipating a bump in intermodal traffic after the bigger canal opens is Florida East Coast Railway L.L.C. (FEC), the only rail provider to south Florida’s ports. Based in Jacksonville, Fla., the 351-mile regional is working with PortMiami and Port Everglades to build on-dock rail facilities as part of their expansion programs, which FEC execs view as a big part of the railroad’s strategy to grow intermodal traffic. “By summer 2014, we’ll have the on-dock rail facility fully operational, which means that from PortMiami we can hit 70 percent of the American population in a matter of days,” says PortMiami Director Bill Johnson. “It will allow us to double stack containers directly to Jacksonville in under nine hours, and connect to Norfolk Southern Railway (NS) and CSX directly to the heartland of America.”

FEC is partnering with both Port Miami and Port Everglades (Fort Lauderdale) to build on-dock rail facilities to provide faster and more cost-effective service to intermodal customers. In addition, the Port of Miami is engaged in the FEC Rail Reconnection Project. The Project has four phases: (1) reconstruction of the Florida East Coast Railway (FEC) Port Lead, (2) rehabilitation of the bascule bridge that connects Port Miami and FEC, (3) the construction of an on-port rail facility, and (4) modifications to FEC’s Rail Yard to accommodate the increase in intermodal traffic. The rail reconnection project is actually part of a larger infrastructure investment program taking place at Port Miami. The other two projects are the Miami Access Tunnel and the 50-foot dredge.