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Panama Canal expansion to hurt intermodal?

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Posted by Anonymous on Tuesday, October 24, 2006 1:08 AM
 jeaton wrote:
 Datafever wrote:
 modorney wrote:

We had to keep it under a billion, because that's what it would cost to build a sea-level canal in Nicaragua. 



If a sea level canal would only cost $1B, why is Panama going to spend $5B+ to expand the existing canal?

Panama should spend a $billion to build a canal in Nicaragua?  Anybody ask the Nicaraguans about that?

So they can smuggle drugs out of town faster? Forget it.

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Posted by jeaton on Tuesday, October 24, 2006 1:07 AM
 Datafever wrote:
 modorney wrote:

We had to keep it under a billion, because that's what it would cost to build a sea-level canal in Nicaragua. 



If a sea level canal would only cost $1B, why is Panama going to spend $5B+ to expand the existing canal?

Panama should spend a $billion to build a canal in Nicaragua?  Anybody ask the Nicaraguans about that?

"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics

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Posted by Datafever on Monday, October 23, 2006 10:57 PM
 modorney wrote:

We had to keep it under a billion, because that's what it would cost to build a sea-level canal in Nicaragua. 



If a sea level canal would only cost $1B, why is Panama going to spend $5B+ to expand the existing canal?
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Posted by Anonymous on Monday, October 23, 2006 10:54 PM
 nanaimo73 wrote:
 Safety Valve wrote:

Dont worry about the carriers. We have LOTS of those. No one does em like we do and there is little oppertunity for Soviet era satuation strikes against them. I dont think our carriers are able to use the Canal but one thing they do have is stamina at very high speeds. I think they are capable of almost 1000 miles displacement every 24 hours. That is a huge amount of ocean.

But they can't be used against an enemy like China that wages economic warfare.

The US trade deficit in August was $70 billion, $22 billion of that was with China.

Sir, Our Carriers along with everything else in our Armed Forces represent the Nation both in Peace and in War. China is currently a friend, however she has made no secret of her ambition to dominate her area in this world and has made advances in many areas including Military Forces as she watches and learns from our way of war fighting. She is also a Nation that thinks in 50-100 year terms ahead. Not 4 years like we do.

If there is ever a war the Deficit will be the least of our worries. It will be ignored as we mobilize and ration the USA for the war effort.

Sir, I fear we WILL need the Canal to get our carriers quickly from one fleet to the other because someday we will have to fight and China does have the power if not the hardware to destroy them at sea.

If I was a foreign power intent on strategic strikes, that Canal will be right up there along with Leesburg VA (FAA), Telecommunications in 4 places, One Gulf Petro and Alaska Petro locations, Bailey Yard in the west and several other locations that are VITAL to our Nation. No two bit terrorist will have these resources like a nation state will.

Like it or not, the Canal along with our Railroads all particpate in the world economy and as much as we can maximize the design limits and introduce any upgrades to better serve shipping is a step ahead.

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Posted by modorney on Monday, October 23, 2006 10:31 PM

I worked (for a shipping company) on a Panama proposal about a decade ago.  The canal toll worked out to about 25 bucks a (40 foot) can.  As mentioned, the canal is limited by water (the locks are gravity locks, and the rainforest water is used once, and dumped in the ocean).  And, as noted, the soil is poor, and the canal silts up quickly, requiring constant dredging. 

The railroad we proposed was similar to the KCS operation today.  Semi-automated cranes would pick off the cans and drop them on trains, rolling the train back and forth to align the empty car with the crane.  Once filled, the train would head to the opposite shore, and the process would be repeated, filling the ships.  Our proposal considered 16,000 teu Malaccamax ships, and it would cost 3 bucks a can to transport. 

Getting the project up and running was less than 100 million, but the full-up, 24 cranes, 8 ships simultaneous, triple track development was about a billion bucks. 

We had to keep it under a billion, because that's what it would cost to build a sea-level canal in Nicaragua. 

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Posted by vsmith on Monday, October 23, 2006 5:07 PM
 eastside wrote:
 vsmith wrote:

Now if there's virtually no traffic from the Pacific to Europe via the rail route, Why are they widening the canal to accomodate ships that are already *not* using the canal in favor of Suez or are already the right size to pass thru the canal?

They're widening the PC so that large ships coming from the Far East can go directly to Gulf or East Coast ports or large ships from Europe can go directly to the West Coast.

Hmmmm...Methinks the Pentagon may be a bigger pusher here than international commerce. Wonder what they have on the drawing board.  I've heard rumors of aircraft carrier sized multi-ship mobile command bases in the study phase. Basicly a complete seaborne military air base that can be sent to trouble zones, anchored offshore, and interlinked via companionways and used to house air and land based forces without necessitating land-based military installations that can become focal points for anti-american attacks from insergents and terrorists and bypassing tricky negotiations for such land based installations. A wider canal would make moving such a system around the world much easier...

I think any terrorist threat to the PC is overrated.  The ones we're concerned with are more interested in killing Americans in America, not holding up commerce in a distant place.  I'm sure the Pentagon is pretty confident of handling the security of the PC.  In addition, a third set of locks acts as added insurance.  Terrorists would have to knock out all three sets.  Sinking a ship in a narrow part of the canal would only impede traffic for a while.  In any case, they could do that now.  Also, part of Panama's plan is to widen the channel.
 
The Mobile Command Bases wouldnt be anchored off Panama, they would be stationed off any overseas trouble spots like near Iraq, Afganistan , Iran  or whereever. The idea being that they could be sent and established far quicker than having to either build a new air base or revise and existing airbase. The base would not be in the territorial waters of any nation so the whole issue of "occupation" is skirted. The idea being that they could steam their way to any trouble spot in any ocean around the world via either the Suez or Panama canals. Given that 80-90% of the trouble spot in the last 10 years have all been within carrier strike range it would logical that the offshore bases could supply any necessary air support either militarily or logisticly without having all the troubles the armed forces have been having with creating large military bases in nations who's populace is not always happy to see us living amongst their populations in large numbers.Anyway its all just digital tics on a computer disk right now...to expensive...$10 B
 
edit HERES the link! there planned to called MOB - Mobile Offshore Bases:

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Posted by vsmith on Monday, October 23, 2006 4:58 PM
 chicagorails wrote:
....and china will be able to get their large russian made aircraft carriers thru then,also!!!
 
Your assuming that the "Rusty Ruskie" would actually make it all the way across the Pacific without breaking down....remember, theres a good reason why the Russians dumped those buckets.Shock [:O]Wink [;)]Eight Ball [8]
 
PS one of them ended up as a floating school/amusement park attraction on a Chinese river.

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Posted by chicagorails on Monday, October 23, 2006 4:13 PM
....and china will be able to get their large russian made aircraft carriers thru then,also!!!
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Posted by eastside on Monday, October 23, 2006 4:10 PM
 vsmith wrote:

Now if there's virtually no traffic from the Pacific to Europe via the rail route, Why are they widening the canal to accomodate ships that are already *not* using the canal in favor of Suez or are already the right size to pass thru the canal?

They're widening the PC so that large ships coming from the Far East can go directly to Gulf or East Coast ports or large ships from Europe can go directly to the West Coast.

Hmmmm...Methinks the Pentagon may be a bigger pusher here than international commerce. Wonder what they have on the drawing board.  I've heard rumors of aircraft carrier sized multi-ship mobile command bases in the study phase. Basicly a complete seaborne military air base that can be sent to trouble zones, anchored offshore, and interlinked via companionways and used to house air and land based forces without necessitating land-based military installations that can become focal points for anti-american attacks from insergents and terrorists and bypassing tricky negotiations for such land based installations. A wider canal would make moving such a system around the world much easier...

I think any terrorist threat to the PC is overrated.  The ones we're concerned with are more interested in killing Americans in America, not holding up commerce in a distant place.  I'm sure the Pentagon is pretty confident of handling the security of the PC.  In addition, a third set of locks acts as added insurance.  Terrorists would have to knock out all three sets.  Sinking a ship in a narrow part of the canal would only impede traffic for a while.  In any case, they could do that now.  Also, part of Panama's plan is to widen the channel.
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Posted by nanaimo73 on Monday, October 23, 2006 3:55 PM
 Safety Valve wrote:

Dont worry about the carriers. We have LOTS of those. No one does em like we do and there is little oppertunity for Soviet era satuation strikes against them. I dont think our carriers are able to use the Canal but one thing they do have is stamina at very high speeds. I think they are capable of almost 1000 miles displacement every 24 hours. That is a huge amount of ocean.

But they can't be used against an enemy like China that wages economic warfare.

The US trade deficit in August was $70 billion, $22 billion of that was with China.

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Posted by Anonymous on Monday, October 23, 2006 3:33 PM

Dont worry about the carriers. We have LOTS of those. No one does em like we do and there is little oppertunity for Soviet era satuation strikes against them. I dont think our carriers are able to use the Canal but one thing they do have is stamina at very high speeds. I think they are capable of almost 1000 miles displacement every 24 hours. That is a huge amount of ocean.

Shipping needs to "Bulk up" as in add capacity. If we need many shipping fast as in right now there wont be enough to go around.

Shipping also needs to improve endurance, stamina and speed. That way they can probably take alternate routes and not lose too much time. Or be under stress when racing the tide to or from a port. 17 knots wont cut it. I would like to see 40 someday.

I dont see trains under the ocean any time soon. If we ever can establish and maintain neutral stability against gaining or losing depth like a submarine with all the sections of a underwater tunnel and keep it all dry, Im all for it.

One would not want to run crappy equiptment or have problems 200 feet below the water surface.

Until then we will have to settle for 50 mile bridges and chunnel type engineering.

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Posted by vsmith on Monday, October 23, 2006 1:52 PM
So again, if it trade is mostly limited to that market, why widen it when the current class of ships are capable of handling the load to South America and I hardly believe there enough suger cane coming out of the Caribbean to support these new superships?
 
Seams like theres other forces at work, not just the clamor of the global marketplace. The Pentagon has wanted to widen the canel since the first generation Nimitz class carriers came on-line.
 
and Yes, I wouldnt hold my breath on the Malacca straight being improved in my lifetime either, I just stated that it could be done, not that it would be done or that anyone would care to PAY for it Wink [;)]

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Posted by Anonymous on Monday, October 23, 2006 1:43 PM

Well, the strait is 800 km long and owned by three different countries (Malaysia, Singapore, and Indonesia), plus China, Vietnam, the Philippines, and Brunei all think they have an interest in it, and 600 ships use it a day, plus a lot of pirates, and its width is also a serious problem, so good luck with that idea.

The market of interest in the Panama Canal is the Caribbean and South America.  They do some business with Asia.

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Posted by vsmith on Monday, October 23, 2006 12:48 PM
 1435mm wrote:
 vsmith wrote:
The Malacca channel can be dredged to increase its depth, thats old technology, someone should remind the Panamainians that the original canal was a major pain the A$$ to build due the absolutley lousy soil conditions in the hills the canal was dug thru, landslides are still a problem to this day. Also as  mentioned, I have to wonder just how vunerable to canals are to over use if they are wider and allow more fresh water to escape than the rain forest can resupply, there no mention of the possibility of adding a major pumping system to pump the water back up into the upper canal are instead of letting it just flow into the ocean like it does today.
 
As I remember currently only about 10% of todays ships are too big for the canal, only the largest oil tankers and the largest US warships are too big, and even with all the intermodel transfers, it still faster to ship a Europe bound container to Long Beach and have it sent acroos the country and reloaded onto another ship in Jersey than to stay on a ship thru the canal and onto a shlep across 2 more oceans to Europe. Plus, isn't most of the crap in these containers STAYING in America? There has been rumblings of building a new major port on the Mexican coast and upgrading road and rail routes to allow for direct shipping from the central Mexican coast straight up Mexico, into Texas and into the Mississippi valley into the center of the country, all this via dedicated rail and truck routes. Bypassing again the need for a wider canal to ship goods to the east coast.
 
Also There was a story this past week about renewed interest in building a direct rail route from China to Europe by filling in missing portions of an almost complete rail route, not using the Russian Trans-Siberian as its too far north but thru a further south route. How would this effect shipping worldwide if instead of a slow boat from China, goods could be put on a fast train to Europe?

Actually you can't dredge the Malacca Strait, the bottom is solid rock.  Anything can be done for a price but no one is seriously considering that one, yet.  And even if you could there's hardly a port in the world that could handle 25 meter drafts without appalling expense. 

There are virtually no containers moving from Asia to Europe via North America.  They go through the Suez Canal.

I'm not holding my breath on a rail route across Asia replacing ocean shipping to Europe to any degree of significance.  There are immense political, cultural, financial, and organizational problems to overcome.

S. Hadid

 
Ever hear of explosives? Yes it CAN be dredged...I never said it would be easy..or cheap.Wink [;)]
 
Widening Suez would be easier and cheaper than Panama by a long shot. No locks, no mountains, no rain forest... only level sea water. I beleive Suez has been enlarged since opening to accomodate most modern ships.
 
The proposed port along Mexico's central coast would be designed from the offset to accomodate the newer bigger draft ships.
 
Now if there's virtually no traffic from the Pacific to Europe via the rail route, Why are they widening the canal to accomodate ships that are already *not* using the canal in favor of Suez or are already the right size to pass thru the canal?
 
Hmmmm...Methinks the Pentagon may be a bigger pusher here than international commerce. Wonder what they have on the drawing board.  I've heard rumors of aircraft carrier sized multi-ship mobile command bases in the study phase. Basicly a complete seaborne military air base that can be sent to trouble zones, anchored offshore, and interlinked via companionways and used to house air and land based forces without necessitating land-based military installations that can become focal points for anti-american attacks from insergents and terrorists and bypassing tricky negotiations for such land based installations. A wider canal would make moving such a system around the world much easier...

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Posted by jeaton on Monday, October 23, 2006 12:13 PM

Mr Green and Mr. Hadid

Thanks for defining Malaccamax. 

I agree that we are not likely to be running any cariers through the new locks and not just for security.  From somewhere I recall that when a carrier deploys from Norfolk, all other vessle traffic between Hampton Roads and some point off of Cape Henry is stopped.  The folks running ship through the Canal might not be to happy about a several hour delay.

On the initial question, past is certainly not prologue.  About the only thing comparable between then and now is the water in the canal and the standard rail gauge.  No doubt the new locks will increase the capacity, but how much?  Will the rest of the canal have the capacity to carry all the traffic when the locks are operating at full speed?  How will the new capacity be used? Asia to US east coast and Europe to US west coast or Asia to Europe?  How fast will port capacities change to handle shifts in traffic?  How will the railroads respond with changes in service and rates?  If mergers produce coast to coast railroads, will they even care?  And on, ad naseum.

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Posted by Anonymous on Monday, October 23, 2006 12:03 PM
 vsmith wrote:
The Malacca channel can be dredged to increase its depth, thats old technology, someone should remind the Panamainians that the original canal was a major pain the A$$ to build due the absolutley lousy soil conditions in the hills the canal was dug thru, landslides are still a problem to this day. Also as  mentioned, I have to wonder just how vunerable to canals are to over use if they are wider and allow more fresh water to escape than the rain forest can resupply, there no mention of the possibility of adding a major pumping system to pump the water back up into the upper canal are instead of letting it just flow into the ocean like it does today.
 
As I remember currently only about 10% of todays ships are too big for the canal, only the largest oil tankers and the largest US warships are too big, and even with all the intermodel transfers, it still faster to ship a Europe bound container to Long Beach and have it sent acroos the country and reloaded onto another ship in Jersey than to stay on a ship thru the canal and onto a shlep across 2 more oceans to Europe. Plus, isn't most of the crap in these containers STAYING in America? There has been rumblings of building a new major port on the Mexican coast and upgrading road and rail routes to allow for direct shipping from the central Mexican coast straight up Mexico, into Texas and into the Mississippi valley into the center of the country, all this via dedicated rail and truck routes. Bypassing again the need for a wider canal to ship goods to the east coast.
 
Also There was a story this past week about renewed interest in building a direct rail route from China to Europe by filling in missing portions of an almost complete rail route, not using the Russian Trans-Siberian as its too far north but thru a further south route. How would this effect shipping worldwide if instead of a slow boat from China, goods could be put on a fast train to Europe?

Actually you can't dredge the Malacca Strait, the bottom is solid rock.  Anything can be done for a price but no one is seriously considering that one, yet.  And even if you could there's hardly a port in the world that could handle 25 meter drafts without appalling expense. 

There are virtually no containers moving from Asia to Europe via North America.  They go through the Suez Canal.

I'm not holding my breath on a rail route across Asia replacing ocean shipping to Europe to any degree of significance.  There are immense political, cultural, financial, and organizational problems to overcome.

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Posted by vsmith on Monday, October 23, 2006 11:10 AM
The Malacca channel can be dredged to increase its depth, thats old technology, someone should remind the Panamainians that the original canal was a major pain the A$$ to build due the absolutley lousy soil conditions in the hills the canal was dug thru, landslides are still a problem to this day. Also as  mentioned, I have to wonder just how vunerable to canals are to over use if they are wider and allow more fresh water to escape than the rain forest can resupply, there no mention of the possibility of adding a major pumping system to pump the water back up into the upper canal are instead of letting it just flow into the ocean like it does today.
 
As I remember currently only about 10% of todays ships are too big for the canal, only the largest oil tankers and the largest US warships are too big, and even with all the intermodel transfers, it still faster to ship a Europe bound container to Long Beach and have it sent acroos the country and reloaded onto another ship in Jersey than to stay on a ship thru the canal and onto a shlep across 2 more oceans to Europe. Plus, isn't most of the crap in these containers STAYING in America? There has been rumblings of building a new major port on the Mexican coast and upgrading road and rail routes to allow for direct shipping from the central Mexican coast straight up Mexico, into Texas and into the Mississippi valley into the center of the country, all this via dedicated rail and truck routes. Bypassing again the need for a wider canal to ship goods to the east coast.
 
Also There was a story this past week about renewed interest in building a direct rail route from China to Europe by filling in missing portions of an almost complete rail route, not using the Russian Trans-Siberian as its too far north but thru a further south route. How would this effect shipping worldwide if instead of a slow boat from China, goods could be put on a fast train to Europe?

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Posted by Anonymous on Monday, October 23, 2006 10:31 AM

 JSGreen wrote:
 jeaton wrote:
Something called a Malaccamax container ship is now viewed as the largest practical size. 


The Straits of Malacca is the passage past SE Asia into the Indian Ocean.  I dont recall a specific narrow passage in the straights; the size limit could be related to ports along the route or maneuverability.  THere is a lot of shipping in that channel...on Radar, it looks like a bridge sometimes!

As to the US Navy and the Panama Canal, the last Aircraft carrier capable of passing though the current locks was the USS Midway, and it had a "hinged" section on the angle deck, so it could be "Folded" up to enter the canal.  Dont know if they ever actually did that, though. 

The politicians probably would like to use the canal to reposition Carriers, but they have to keep in mind it wouldnt take an overly sophisticated terrorist action to put both sets of locks out of commission for a while, stranding any ship that happens to be in the upper lake...and it would be REAL TOUGH to fly many power projection sorties from a lake that small!  As it is, the number of carriers we have are already fully scheduled without trying to swap from coast to coast!My 2 cents [2c]

The channel is only 1.5 miles wide at its narrowest point, but even worse is its depth, as little as 25 meters.  That's your limiting factor on a ship!

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Posted by JSGreen on Monday, October 23, 2006 9:46 AM
 jeaton wrote:
Something called a Malaccamax container ship is now viewed as the largest practical size. 


The Straits of Malacca is the passage past SE Asia into the Indian Ocean.  I dont recall a specific narrow passage in the straights; the size limit could be related to ports along the route or maneuverability.  THere is a lot of shipping in that channel...on Radar, it looks like a bridge sometimes!

As to the US Navy and the Panama Canal, the last Aircraft carrier capable of passing though the current locks was the USS Midway, and it had a "hinged" section on the angle deck, so it could be "Folded" up to enter the canal.  Dont know if they ever actually did that, though. 

The politicians probably would like to use the canal to reposition Carriers, but they have to keep in mind it wouldnt take an overly sophisticated terrorist action to put both sets of locks out of commission for a while, stranding any ship that happens to be in the upper lake...and it would be REAL TOUGH to fly many power projection sorties from a lake that small!  As it is, the number of carriers we have are already fully scheduled without trying to swap from coast to coast!My 2 cents [2c]
...I may have a one track mind, but at least it's not Narrow (gauge) Wink.....
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Posted by rrandb on Monday, October 23, 2006 9:12 AM
Your question was will this hurt intermodal? There only way it could hurt is that all railroads will need to spend more money for increased capacity. The amount of IM will only increase due to more and better ships being able to go both ways. Europe will have access to west coast ports previousely unavailable and Asia to east coast. There will still be transcon IM as there is only so much east coast port capacity and RR's will get the time sensitive freight. Traffic pattern are always in a state of flux and this is how it always has been. Remember the B & O railroad impacted the B & O canal when it first opened. The railroad got the time sensitive freight and the canal hauled bulk goods.
 
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Posted by jeaton on Monday, October 23, 2006 8:36 AM

Here is something.

The numbers I get for the dimensions on the new locks are 1400 x 180 feet. This is adequate for most Panamax container ships, but already too small for the Emma Maersk, the latest and the largest container ship, which is 1300 long with a 184 beam.  Something called a Malaccamax container ship is now viewed as the largest practical size.  At 1542 x 196 feet it would carry 18,000 TEU's.  From what I read, anything larger would require rebuilding supporting infrastructure everywhere. 

Given that completion of the expansion is about ten years out, I would say any assesment of the impact on BNSF and UP is highly speculative. 

 

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Posted by wallyworld on Monday, October 23, 2006 8:28 AM
No. Traffic still needs to be transloaded inland, regardless of the location of the port, either East or West Coast. All that extra container capacity on ship board equates to more traffic at ports and on rails. Infrastructure already severely limited could easily take a hit.

Nothing is more fairly distributed than common sense: no one thinks he needs more of it than he already has.

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Posted by eastside on Monday, October 23, 2006 6:49 AM
 samfp1943 wrote:

Someone with deep pockets will have to step up to finance this, and since the Chinese are already there in Panama [ Hutchinson Whampoa, as site managers, I think].

Maybe they will provide the deep pockets, but you can bet, it will not be without strings !

You have it right, but I bet it won't be the Chinese.  According to Wikipedia the current canal locks are

"110 ft wide by 1050 ft long, and 85 ft deep. The usable length of each lock chamber is 304.8 metres (1000 ft)."

According to a story in today's New York Times the added locks will be 60% wider and 40% longer.  (BTW, while you're there, check-out this satellite image of North Korea.)

The unspoken factor is that I'm sure the U.S. Navy would dearly like to be able to move Nimitz class aircraft carriers (length 1092 ft, beam 134 ft, draught 37 ft) through the canal.  They'd also have to consider that the flight deck is much wider.  So I wouldn't be surprised if Uncle Sam ends up paying for many of the improvements.
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Posted by samfp1943 on Monday, October 23, 2006 1:12 AM
 tomikawaTT wrote:

In addition to the distinct probability that modernizing the Panama Canal will run well behind schedule and over budget, there's the minor detail that even rainy Panama may not have enough runoff to operate the new locks!  That was mentioned (and quickly glossed over) in the TV documentary I watched on the subject.

It is now 2006.  Even the rosiest of optomistic schedules won't see post-Panamax ships passing through the Panama Canal for nine years.  I wouldn't sell my UP and BNSF stock just yet.

Chuck

I think Chuch has it right!

Someone with deep pockets will have to step up to finance this, and since the Chinese are already there in Panama [ Hutchinson Whampoa, as site managers, I think].

 Maybe they will provide the deep pockets, but you can bet, it will not be without strings !

 

 


 

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Posted by eastside on Sunday, October 22, 2006 11:07 PM
 tomikawaTT wrote:

In addition to the distinct probability that modernizing the Panama Canal will run well behind schedule and over budget, there's the minor detail that even rainy Panama may not have enough runoff to operate the new locks!  That was mentioned (and quickly glossed over) in the TV documentary I watched on the subject.

In the account I read, the engineer who is co-ordinating the project says the new, larger locks will recycle the water and actually use 7% less water than the existing ones.
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Posted by solzrules on Sunday, October 22, 2006 10:10 PM

Michael:

It is obivous that you have a fuller understanding of what happened with the Milwuakee, certainly I am not going to take issue with that.  I am only repeating what I read in books.  When the PCE was abandoned I was still in diapers!  I also understand that it is a controversial topic, and that from time to time certain people tend to let their view on the matter cloud the facts. 

 

Otherwise:

I don't think the canal's opening and operation can be overlooked with respect to transcon traffic in the 1910's - perhaps the profitability of certain railroads improved, but overall traffic was affected by it.  Certainly if railroads were able to haul what traffic there was more efficiently then of course profitability would increase regardless. 

I feel that a revitalized canal in 2015 would certainly give the major intermodal carriers a run for their money - BNSF probably has the most to lose along with UP.  NS and CSX would be hauling the containers either way - ships docking on the east port with destinations inland would have to use them and ships docking at Texas would wind up using those two carriers for points east no matter how you slice it. 

Of course this is pending the successful completion of the canal - something that could never come to fruition.  It is a government project, and that already places it at a disadvantage because it will be subject to political pressures not noramlly seen in the private sector.  Throw in some corruption and you may have all the fixins for a mess. 

You think this is bad? Just wait until inflation kicks in.....
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Posted by tomikawaTT on Sunday, October 22, 2006 9:37 PM

In addition to the distinct probability that modernizing the Panama Canal will run well behind schedule and over budget, there's the minor detail that even rainy Panama may not have enough runoff to operate the new locks!  That was mentioned (and quickly glossed over) in the TV documentary I watched on the subject.

It is now 2006.  Even the rosiest of optomistic schedules won't see post-Panamax ships passing through the Panama Canal for nine years.  I wouldn't sell my UP and BNSF stock just yet.

Chuck

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Posted by MichaelSol on Sunday, October 22, 2006 9:36 PM
 solzrules wrote:

1435mm:  Actually, the railroad I mentioned, the Milwaukee Road, completed their transcon in 1909.  Just as the line was begining to come into element and establish itself the panama canal opened and took away much of the traffic that would have moved on the line.  This is a case of the rr not having any business because the line just opened up.  NP and UP were more established at that time and I think they were able to absorb the loss, although it was painful.  The Milwaukee never fully recovered. 

Don't take my word for it.  Jim Scribbons mentions it in his book about the Milwaukee Road, and I think even the company annual reports for the period talk about the affects the canal was having on the ability to maximize the traffic potential of the pacific coast extension. 

This is unsupported by the data.

"In the early 1900's, the Milwaukee had indeed begun slipping into the position of a second class railroad. From being the largest of its peers, it began slipping until both the Northern Pacific and Great Northern surpassed it in overall revenues; the Burlington and the Northwestern had surpassed the Milwaukee in total revenues in 1902 and the gap grew larger and larger. By 1912, the Milwaukee had gone from the largest railroad in terms of revenue in 1895 to the smallest among its peers. Even the lowly NP, which earned only half of the Milwaukee's revenues as recently as 1900, had surpassed the Milwaukee in 1912. Miller's concerns appeared to be entirely justified: the Milwaukee Road as a Midwestern road was fast becoming a second-class railroad.

"After the Pacific Extension was completed, however, this began to change, and the change was dramatic. After 1913, the Milwaukee gained revenue more rapidly than any of its competitors, and by 1925 had outstripped them all. The dynamic growth of the NP and GN prior to 1912 appears to have been diverted after that date to the Milwaukee, and both of the transcontinental carriers grew much more slowly compared with the Granger railroads, and especially the Milwaukee. GN and NP lost traffic; by comparison Milwaukee had become, in the words of one U.S. Senator, the fastest growing railroad in America after the Santa Fe."

This is not opinion. I graphed the gross revenues of the relevant roads, 1895-1925, to "show" the effects of the Panama Canal, and the alleged weakness of the Milwaukee out West. I was surprised by the result. Rather than the exhibit demonstrating what I had written -- written with all due conviction based on numerous published sources thoroughly researched and conforming entirely with the conventional wisdom -- it demonstrated the exact opposite, that the Milwaukee was spurred to unprecedented growth. I had to go back and re-examine what I had written.

Nobody had actually looked at the numbers. They did not support the purported "weakness" of the Milwaukee, and particularly after the Panama Canal which is when the Milwaukee, as it rapidly grew, significantly diverged from the NP and GN as they declined.

 

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Posted by Anonymous on Sunday, October 22, 2006 9:29 PM
 solzrules wrote:

1435mm:  Actually, the railroad I mentioned, the Milwaukee Road, completed their transcon in 1909.  Just as the line was begining to come into element and establish itself the panama canal opened and took away much of the traffic that would have moved on the line.  This is a case of the rr not having any business because the line just opened up.  NP and UP were more established at that time and I think they were able to absorb the loss, although it was painful.  The Milwaukee never fully recovered. 

Don't take my word for it.  Jim Scribbons mentions it in his book about the Milwaukee Road, and I think even the company annual reports for the period talk about the affects the canal was having on the ability to maximize the traffic potential of the pacific coast extension. 

Perhaps, but does the annual report just trot that out as an excuse to investors for management's sorry performance, or do the revenue and GTM charts in the report show any actual change?  More importantly, do the annual reports of ALL the transcons show a "Pamana Canal Effect" at that time?  If such a thing exists it wouldn't affect just the Milwaukee Road.  All the roads were charging the same rates by this time under regulation.  All due respect to Mr. Scribbins, who I know well, but I don't think he enjoyed reviewing the traffic and tonnage figures.  I haven't seen any evidence in his books and articles, at least.

S. Hadid

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Posted by eastside on Sunday, October 22, 2006 9:05 PM
That article was uninformative about the specifics.  Panama plans a third pair of locks that are capable of accommodating post-Panamax ships.  In addition the channel will be widened and deepened to handle ships twice as large. It'll make KCS's Panama Canal Railroad pretty much a tourist line, that's for sure.  However, given the waste and corruption down there, I'd give them at least ten more years of life.  As for the U.S. railroads, their capacity and the west coast ports may well be maxed-out by then so the shipping lines are going to look for ways to cut costs by going to the east coast directly.

There was a thread a couple of months ago about the giant container ships that might use the enlarged canal.

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