Panama Canal expansion to hurt intermodal?

[rob_l]

Here are my rough rule-of-thumbs on costs of transporting marine boxes:

Steamship rates for a 40-ft dry box are $400-$500 + $0.05 per container nautical-mile (note the fixed factor for the terminals at either end)

Rail double-stack-train rates for a 40-ft dry box are $200-$250 + $0.50 per container-mile plus the cost of the drays at either end, if any (note the fixed factor for the terminals at either end)

In terms of rates that shippers pay, passing a box through a steamship terminal costs $200 - $250

In terms of rates that shippers pay, passing a box through a rail intermodal terminal costs $100-$125

Rates vary by customer and are moving up dramatically these days, so take these figures with a grain a salt.

But please note two very important points:

(1) Terminal costs are a huge proportion of the cost. Lifting the box is the most expensive and most inefficient step in the overall process. Adding more terminal steps in the overall movement of the box adds a substantial amount of cost. I don't believe a rail landbridge could be economically preferred to a larger canal, unless the volume were so low that the capital expense of expanding the canal could not be recovered.

(2) Ignoring the fixed factors for terminals, steamship transport per mile is roughly an order of magnitude cheaper than rail transport, even for 6,000-ft double-stacked trains. In terms of transport costs, going around the USA through the Panama Canal is much cheaper than going across the USA on rail, even in spite of the mileage penalty. It just takes much longer.

Best regards,

Rob L.

[Anonymous]

Here are my rough rule-of-thumbs on costs of transporting marine boxes:

Steamship rates for a 40-ft dry box are $400-$500 + $0.05 per container nautical-mile (note the fixed factor for the terminals at either end)

Rail double-stack-train rates for a 40-ft dry box are $200-$250 + $0.50 per container-mile plus the cost of the drays at either end, if any (note the fixed factor for the terminals at either end)

In terms of rates that shippers pay, passing a box through a steamship terminal costs $200 - $250

In terms of rates that shippers pay, passing a box through a rail intermodal terminal costs $100-$125

Rates vary by customer and are moving up dramatically these days, so take these figures with a grain a salt.

But please note two very important points:

(1) Terminal costs are a huge proportion of the cost. Lifting the box is the most expensive and most inefficient step in the overall process. Adding more terminal steps in the overall movement of the box adds a substantial amount of cost. I don't believe a rail landbridge could be economically preferred to a larger canal, unless the volume were so low that the capital expense of expanding the canal could not be recovered.

(2) Ignoring the fixed factors for terminals, steamship transport per mile is roughly an order of magnitude cheaper than rail transport, even for 6,000-ft double-stacked trains. In terms of transport costs, going around the USA through the Panama Canal is much cheaper than going across the USA on rail, even in spite of the mileage penalty. It just takes much longer.

Best regards,

Rob L.

Awersome, thanks!

[Anonymous]

  
Of course, if it were railfans making the decisions, not managers worried about the bottom line, they would already be working on it!

If we railfans were in charge of global trade, we'd rather spend the money on the Alaskan rail link and a subsequent Bering Strait rail "Chunnel" to connect the NA rail grid to the Asian rail grid, and then we'd let those Pacific Rim ports rot for all we care!

(incompatible rail guages notwithstanding)

[Anonymous]

If it was up to me, I will concentrate on meeting all Industrial and Domestic needs right here in the USA and then all of those Trans-pacific shipping can rot except for some of those wonderful cars. Worker costs, benefits and cost savings be damned. It would be made right here in the USA and we wont need to have it imported from overseas except for a few select items.

[CrazyDiamond]

vvtdeb wrote: "If rail can do it CHEAPER....they will KEEP the business. It won't matter if you can put a super-sized ship through the expanded canal  or not.  If it isn't cost effective compared to RAIL it won't be used."

I really believe that as the world runs out of cheap energy, and the cost of energy soars, the mode of transport that carries the most goods using the least amount of energy will become dominant....and let's face it, trains have the least amount of friction holding them back.

[Anonymous]

vvtdeb wrote: "If rail can do it CHEAPER....they will KEEP the business. It won't matter if you can put a super-sized ship through the expanded canal  or not.  If it isn't cost effective compared to RAIL it won't be used." I really believe that as the world runs out of cheap energy, and the cost of energy soars, the mode of transport that carries the most goods using the least amount of energy will become dominant....and let's face it, trains have the least amount of friction holding them back.

Coal we do have. Steam can return someday, maybe not in the form we know it.

We already run steamships via nuclear power particularly in Military use.

[Anonymous]

Any estimates or data on how many containers (TEUs?) the Panama Canal railroad is currently moving between the oceans?

KCS had predicted 220,000 containers(?) annually and I think they may be getting close.

Canal expansion has to hurt this goal, yes?