Widening of Panama Canal will allow ships to bypass California and come straight to Texas

NBC News:

For the first time since its completion a century ago, the Panama Canal is being widened, setting up a long and costly battle among U.S. ports for the business of handling supersized container ships filled with goods from Asia.

When the project is completed in 2015, ports on the East Coast and Gulf Coast will be able to compete for business that until now has been dominated by West Coast ports.

At stake are thousands of jobs and billions of dollars in federal and local investment.

The case of the MSC Fabiola — a hulking mass of steel and containers nearly as long as the Empire State Building is high — illustrates what those stakes are.

When the Fabiola pulled into the Port of Long Beach on a foggy Friday morning this spring after a 13-day trip across the Pacific Ocean from China, it was a major event, although it received little attention. The ship's arrival marked the first time in history that a ship of its size had docked at a U.S. port.

Khalid Bachkar, a professor at the California Maritime Academy, said the shipping industry is shifting toward megaships. “This is the new trend,” he said.

Massive vessels like the Fabiola carry two to four times the number of containers as older vessels, which means fewer trips for shipping companies and bigger savings for manufacturers and importers.

What happens in the future of the shipping industry will affect millions of working Americans, as well as the economies of states throughout the country — with the strongest consequences affecting California.

The Fabiola represents the highly competitive, highly secretive and highly lucrative business of international shipping. Ocean-faring transport companies such as the Fabiola’s Mediterranean Shipping Company constantly seek to establish themselves as a shipper’s best choice for moving a product from Point A to Point B. The battles they wage on land and sea can ripple out to affect secondary industries across an entire continent.

The thousands of points they travel between are called ports of entry. The United States has 329 official land, sea and air ports that compete with one another — just like the shippers — for their piece of a market valued annually in the trillions of dollars.

The West Coast has reaped the benefits of container traffic in the U.S. since the mid-1990s, led in no small part by California’s giant neighboring ports of Los Angeles and Long Beach. Ports on the East and Gulf coasts, with their more limited water depths and rail connections, haven’t been able to keep pace.

Yet a development occurring now in the heart of Central America will crack this solid foundation in a few short years — as it once did in 1914 — affecting global trade routes and the economies of states and countries worldwide.
...

Today, cargo crossing the Pacific bound for the Midwest and Eastern United States must offload at a U.S. Pacific Coast port if the ship carrying it is too large to pass through the canal’s 50-mile waterway. These goods are then routed across the country using the U.S. “land bridge,” the network of highways and railways linking East and West.

Once the widened canal is navigable, many megaships will no longer need the land bridge. Instead, they will pass through the canal’s wider locks to offload their cargo at a Gulf or East coast port, such as Houston, New Orleans or New York.

“Trade will shift,” Bachkar said. “Instead of coming to the West Coast, it will go directly to the East Coast and on to Europe.”
...

There is much more.

The Port of Houston is already anticipating the change and its central location on the Gulf Coast gives it advantages for getting goods to the Southwest and Midwest cities.  The deliveries will correspond with the availability of new ethylene production in Texas used for making most plastics.  These new manufacturing facilities will be coming on line at about the same time taking advantage of low cost natural gas.