One year after the opening of the Panama Canal expansion, East Coast ports are receiving some of the largest ships to ever call in the region. While a number of ports already have the channel depths required to receive such vessels, others are working on deepening and expansion projects to accommodate the growing size of vessels that are transiting the canal.

Experts say that while the trend is gradual, expanding port access and new routes are offering new transportation options between the East Coast and Asia.

More Direct Trade Route Between the East Coast and Asia

The Panama Canal expansion opened in late June of 2016 after nearly a decade and $5 billion worth of construction. The new locks and channels have doubled the canal’s capacity and can boost shippers’ economies of scale by allowing larger, wider and deeper vessels to transit the canal. While the expansion opened to questions about its design and international shipping trends, the Panama Canal Authority said in a written statement that it has since experienced a “boon in cargoes from newer segments, larger quantities and rerouted shipping lines.”

The expanded canal has so far transited more than 1,300 Neopanamax vessels, an average of 5.9 per day. Container ships now represent more than 40 percent of the vessels while the remaining consist of liquefied petroleum gas and liquefied natural gas. The Panama Canal Authority said the expansions are reverberating beyond Panama and around the world with a new and more direct trade route between Asia and the East Coast. The authority notes that January 2017 was a record month, with many U.S. ports such as Charleston, Philadelphia and Savannah also experiencing record container volume.

“Ports around the world are in varying stages of work to deepen and widen their channels to accommodate the growing number of Neopanamax vessels that can now transit the canal,” the authority said.

Many of these larger ships are already bringing record volumes to East Coast ports. In early May, the 13,092-TEU COSCO Development docked in the region, and less than a month later the 13,208-TEU, 1,202-foot-long OOCL France became the largest ship to ever transit the canal. It called at a number of ports including Charleston and Savannah before heading to Hong Kong. Both vessels are part of Ocean Alliance’s weekly South Atlantic Express service between Asia and the United States.

East Coast Ports Capitalizing on Larger Ships

A number of ports on the Atlantic say they are ready to accommodate the newest and largest Panamax ships. Griff Lynch, executive director of the Georgia Ports Authority, said the Port of Savannah is well-positioned to capitalize on the growing number of larger ships transiting the canal. Because Savannah is the westernmost port on the East Coast, he says it is often the first call made on arrival and the last call made on departure. Lynch says in the first 10 months of the fiscal year 2017, nearly 35 percent of Savannah’s import and export cargo transited the Panama Canal. “By loading up on the last stop, vessels avoid carrying unnecessary weight during the port calls along the coast,” Lynch says.

The Savannah Harbor Expansion Project (SHEP) is expected to be completed in 2020 and will allow 14,000 TEU equivalent container vessels to call on the port with greater scheduling flexibility. Lynch says proximity to Midwest manufacturers could make Savannah a more viable and cost-effective port of entry for parts or for sending finished goods. He estimates that as the SHEP project comes online, many American businesses will be able to save 20 to 40 percent on transportation costs by their cargo going through Savannah.

Joe Harris, Virginia Port Authority spokesman, says fiscal year to date volumes at the Port of Virginia are up across the board in all categories, including truck, trail and barge. He attributes much of this to a strong economy, growing confidence in the Port of Virginia and the Panama Canal expansion. The port is currently working on $670 million worth of improvements and projects that will expand container capacity by 40 percent by 2020. Harris says these ships are also coming in “loaded heavy” into Virginia to take advantage of the deep water before offloading and making calls at peer ports to the south that haven’t yet completed their deepening projects.

“We’re going to continue to take advantage of it, because we know we can grow our ship sizes parallel to what is happening. The Panama Canal is certainly a contributor to this,” Harris says. “We’re now seeing [larger vessels] once per week coming from China via the canal.”

Other East Coast Ports Upgrading to Accommodate New Panamax

Many ports are still working on infrastructure projects to accommodate new Panamax ships. At the Ports of New York and New Jersey, the recently completed Bayonne Bridge-raising project now allows the largest ships to gain access to the ports of Newark, Staten Island and Elizabeth. New Jersey Governor Chris Christie said at a conference in May that it’s a “game-changer” that will help generate billions of additional dollars in economic activity to the region.

Steve Coleman, spokesman for the Port Authority of New York and New Jersey, says the bridge has been raised to a clearance of 215 feet, allowing ships of up to 18,000 TEUs to call on all terminals. He says it gives the ports an opportunity to compete for more discretionary cargo destined for inland points by truck and rail. The port has been preparing for the expansion for nearly a decade by deepening the harbor to 50 feet, expanding intermodal rail facilities and investing in larger gantry cranes.

Other deep-water ports on the East Coast include Miami, Norfolk and Baltimore. The ports of Boston, Charleston, and Jacksonville are also deepening their harbors, and the Port of Virginia is studying the benefits of deepening the harbor and channels to 55 feet, which would make it the deepest port on the East Coast.

Harris believes while more Asian bound and incoming cargo will enter the U.S. on the East Coast, the trend will happen slowly over the next decade. He also notes that despite access and cost, shippers want to diversify their routes. He points to past work stoppages, environmental controls, congestion and surcharges that have occasionally led to delays and added expenses on the West Coast. “I think we are seeing that the ocean carriers and cargo owners are diversifying their logistics chains and using the East Coast,” Harris says. “When you have 50 feet of water up and down the East Coast, we think it’s going to be a good thing for cargo coming here.”