The demand for truck drivers comes from every direction, but one of the strongest pulls on the industry comes from a development in Central America. Come 2015, the Panama Canal will go from two locks, to three. This expansion will enable the amount of cargo that passes through the canal each year to double. At the present time, the two lock system can manage ships with 5,000 TEUs, or twenty-foot equivalent unit containers. With three sets of locks in place, ships will be able to haul up to 13,000 TEUs. Along with the extra pair of locks, the canal’s lake, Lake Gatun, will be expanded, as will many of the canal’s access ways.
With this 5.25 billion dollar expansion comes some significant effects for the trade and transportation industry. With the canal being able to handle larger loads, the Maritime Administration reports that shippers that can manage to use larger ships for their transports should see cost savings. Whether consumers see these cost reductions is up to the companies and their competition.
The field of trucking will also see some changes due to this expansion. With more cargo able to come through the canal, the ports where this cargo is headed will need to be able to handle it all. Maritime administrators report that more trucks will be needed at these ports to move freight. This could mean an even higher need for drivers and possibly a change to HOS regulations. If trucks at these gates cannot manage the cargo efficiently, major backups and delays are likely.
How trucking will fare
While some may have doubt that the trucking companies can handle this expansion, the American Trucking Association does not. In April of this year, Vice Chairman of the ATA, Phil Byrd, shared his testimony on why it was not the trucking industry that was unprepared for extra cargo. Byrd doesn’t see any “capacity shortages” in trucking that would decrease transportation efficiency, but does see some issues regarding the ocean carriers and ports. One change that may affect trucks and shipping is ocean carriers no longer owning chassis. In the past, ocean carriers would own the chassis used for shipping, and the motor carrier would not have to pay much if anything to use them. Now, more ocean carriers are using chassis leasing companies that are charging the motor carrier daily fees. Byrd leaves it up to time to determine the full effect of this mode of operation.
In addition to chassis operations, Byrd discussed the possible effects of HOS regulations, especially the 34 hour restart. He believes if the regulations remain as binding as they are, driver efficiency will decrease. Also, the ports and their surrounding areas could prove unable to handle the increased freight. Byrd reports that the American Society of Civil Engineers gave ports a C grade and roads a D in their 2013 report. The ports performed poorly because they need more development in maintenance and expansion, and because their connections to the water, roads, and rails, was less than par. The U.S. roads received a D grade because almost half of all highways are overcrowded and many are underfunded.
So while the the increase in freight will affect every part of transportation, the ATA feels equipped to handle it. They are aware however, of outside factors that may prove to be obstacles. Whether HOS regulations are changed or infrastructure is improved, I guess we’ll all find out in 2015.
, panama canal