By ROBBIE WHELAN, Wall Street Journal-
Ports on the U.S. East Coast have been hurrying to prepare their harbors, terminals, and roads for the arrival of supersize container ships that are expected to pass through the Panama Canal once its expansion is completed later this month.
But the East Coast’s busiest port won’t be ready for them.
Late last year, the Port Authority of New York and New Jersey announced that a project to raise the Bayonne Bridge, an 83-year-old arch that spans the channel between Bayonne, N.J., and New York’s Staten Island, would be delayed until the end of 2017 because of engineering miscalculations and construction work slowed by inclement weather.
Until the project is completed, larger ships passing through the Panama Canal will be unable to visit the three largest terminals at the Port of New York and New Jersey, located beyond the bridge in Newark and Elizabeth, N.J.
The delays undermine the economic rationale for the expansion, and raise doubts about whether the wider canal will lead to an immediate surge in cargo headed for the East Coast. New York, with its bustling port and direct access to the densely populated Northeast corridor, was the destination many Asian exporters and shipping lines had in mind when they pushed for a wider canal.
Some carriers now say they will hold off on booking voyages via Panama for their larger ships. Others are spending millions to retrofit bigger vessels they had already committed to routes between Asia and the East Coast, eating into the expected savings from sending those ships through the canal.
If New York isn’t ready, it is unlikely that any U.S. East Coast ports will see the biggest ships either, according to Marc Bourdon, who heads the U.S. operations of France’s CMA CGM Group, one of the world’s largest shipping lines.
“With the Panama Canal opening, I think you’ll see some…slightly larger vessels coming through, but not the biggest ones,” Mr. Bourdon said. “You need New York to take them. It’s the major port. None of the other ports along the coast would be able to sustain a vessel of that size.”
Shipping lines like CMA CGM want to boost traffic on direct routes between Asia and the East Coast because they can charge more to carry containers greater distances and save money by piling thousands more containers onto one ship. Shippers would also save because they wouldn’t need to book trains or trucks to carry their goods across the country. The cost of shipping a container from Hong Kong to New York rises by more than 50% if it is delivered to a West Coast port and moved overland the rest of the way, according to Catapult International.
The U.S. Coast Guard approved the $1.3 billion bridge-raising in 2013. The project, and a $1.6 billion deepening of the harbor, were meant to prepare the region for the arrival of bigger ships.