Update our ports or miss the boat
Someone once said that it’s not leaving port, but coming in, that determines the success of a voyage. While this has some truth to it, the port that one departs from is just as important to a successful endeavor.
It may surprise many that if the planned expansion of the Panama Canal was completed tomorrow, the United States, one of the world’s largest trading powers, would only have six ports deep enough to handle the new larger ships that will pass. Yet, we are competing with all other parts of the world that are updating their ports. Since agriculture goods play a significant role in U.S. trade, modernizing our ports is extremely important for farmers and ranchers to be able to continue to thrive in the world market.
If You Build It, They Will Come
Even more surprising than the U.S. only having six large ports is the fact that all these ports are isolated on the East and West Coasts. That’s right, Gulf Coast ports, including New Orleans, do not currently have the capacity to handle larger ships. If upgrades to U.S. ports are not completed in time, for major trade leaving the U.S. Gulf, smaller boats will need to be utilized to trans-ship our goods to ports like those in the Bahamas and Dominican Republic, where they would offload to larger vessels traveling to Latin America, Asia and other parts of the world. Similarly, goods coming from other countries would potentially have to go through the same routine in the Caribbean, offloading to smaller vessels to enter ports in the U.S. Gulf.
If you are scratching your head, you aren’t the only one. This process of loading and offloading ships costs a lot of money. Inadequate port size also leads to higher transportation costs because vessels may be loaded to less than capacity and more vessels may be required to ship the same amount of commodities.
In the meantime, our competitors around the world fare much better. Because their ports are deep enough, it is easier and less expensive to move products in and out. Further, Europe, Africa, Asia, Latin America and the Caribbean are all undergoing major new port projects or expansion of existing facilities.
Latin America, for example, is rapidly continuing with some of the world’s most sizable port development projects. The region is catching up with other regions through larger port investments, which stand at almost $12 billion. This means China will have access to sell its farm products to Latin America, where Asia never had access before.