Saturday, January 9, 2016

The Expansion Of The Panama Canal Is A REALLY Big Deal

One possible fly-in-the-ointment: it appears half the dry bulk carriers are going to go broke before construction is completed later this year. The container companies are doing a little better but even they are mothballing ships.

From Places Journal, December, 2015:

The shockwave of Panama Canal expansion is reshaping cities throughout the Americas. We need to look through the lens of landscape, not logistics.
Over the past five hundred years, the Panamanian isthmus has been transformed by a succession of megaprojects: the first colonial European city on the Pacific Coast; the mule trains that moved the plundered silver of Bolivia and Peru to Atlantic ports; the first railroad to cross the continental divide; the failed project to construct a sea-level canal connecting the two oceans; and then the immense complex of locks, dams, artificial lakes, and engineered channels that constitute the Panama Canal, which opened in 1914.

Now the canal is being reconfigured by a $5.5 billion expansion project scheduled for completion early next year. 1 Approved by national referendum in 2006, the expansion effectively doubles the canal’s capacity by adding a new set of locks to accommodate larger container ships. Chambers with walls 50 feet thick are being grafted directly onto bedrock, like extensions of the isthmus itself. 2 But the construction — monumental as it is — is only a small part of the story. More important is how the Panama Canal expansion is altering logistical relationships and generating new infrastructures throughout the American Hemisphere.

Almost as soon as the referendum passed, port authorities from Miami to Lima began racing to complete their own expansion programs: dredging deeper shipping channels, installing larger gantry cranes, and building new container yards, in speculative efforts to compete for the ultra-large container ships that will transit the widened canal. An intense wave of anticipation ripples outward throughout the multi-continental network of waterways, ports, inspection stations, railroads, switching yards, highways, warehouses, and distribution centers that enable the global flow and movement of shipped materials. 3

The expansion will reconfigure trans-American shipping in three primary ways. 4 First, a higher volume of goods will move faster between the two oceans, decreasing transport costs and altering the delicate financial calculus that determines global shipping routes. Second, as canal traffic increases, there will be a corresponding rise in transshipment, where goods are transferred to smaller ships that service cities with shallower harbors. The canal’s three ports — Balboa, Colón, and Manzanillo — will link distribution centers like Shanghai with smaller hubs like Barranquilla, Colombia, thus increasing Panama’s importance to regional shipping networks. Third, the expansion will provide an attractive alternative for shipping agricultural products from the interior United States to East Asian markets, elevating the Mississippi River corridor relative to the currently dominant overland routes to Pacific ports.

This massive reconfiguration of landscapes and infrastructures is organized primarily through the invisible hand of logistics, which seeks economic gain and functions through paradigms of efficiency and control. But these transformations should not be understood solely along economic and technical lines, for they are also cultural, social, political, material, and ecological. With its narrow focus on optimizing profit margins, wait times, and warehousing schedules, logistics is largely indifferent to the effects of canal expansion on societies and landscapes, and to the roles of people, corporations, and governments in shaping those effects. When we widen the lens to consider these broader dimensions, we find that logistics is not the neutral actor it may seem to be. Rather, it produces inefficiencies and excess at multiple scales, from the material surplus of the excavations to the speculative bubble of overbuilt infrastructure across the hemisphere.

Landscape provides a more useful analytic framework. Geographers, planners, architects, environmental designers, and others who take a landscape approach are fundamentally concerned with value systems that include the cultural, social, and material. J.B. Jackson famously argued that “a landscape is not a natural feature of the environment but a synthetic space, a [hu]man-made system of spaces functioning and evolving not according to natural laws but to serve a community.” 5 The key question is: Whose values are inscribed in the landscape? Which community’s needs are served?
Here we focus on one dimension of the Panama Canal expansion — the material — as it reverberates throughout the Americas, in the form of deeper harbors, reconstructed islands, restored wetlands, redeveloped waterfronts, and other new infrastructures. While our study is not comprehensive, it offers lessons that may prove useful across a range of social and environmental issues where similar dynamics are at work.

The Logistical Production of Space
Logistics is the design and management of the flow and distribution of goods. Although it is now often deployed in the service of global capitalism, 6 logistics originated in military science, as a set of strategies for organizing the distribution of materials and services within national territories and occupied lands. As such, it has always had a sociopolitical dimension: Who is positioned to distribute things to whom? By what methods? For whose benefit? At what expense?

As an expanding set of ideologies, practices, and protocols, 7 logistics now exceeds its original meaning as a pragmatic “science of distribution.” Seeking nothing less than the total “monetization of space and time,” it has emerged as a dominant force in “the cold calculation of cost at the center of the production of space.” 8 This is particularly true of maritime landscapes like the Panama Canal, where the goals of logistics and commerce have essentially converged. 9

Since World War II, logistics has advanced via technologies such as containerized shipping, upgrades in data management, and complex trade agreements. And yet its objectives remain deceptively simple: efficiency and reliability. In commercial shipping, logistics seeks “the management of demand and supply to avoid surpluses and shortfalls, the full utilization of resources, minimization of losses in transportation, cost reduction in transportation and storage, meeting customer needs in order fulfillment and improving customer service and customer communication.” 10 And these are not merely tabs in a financial analyst’s spreadsheet, because logistics always has a spatial component. It enacts “geographies of rationalization and optimization” while constructing “new lived relations of space–time” for those within its network. 11
The decade-long Panama Canal expansion involves cutting new access channels, enlarging existing channels, and installing new locks at both ends. [Map by the authors]
This spatial dimension is necessarily material. Logistical geographies depend on the connective tissue of regulations, shipping schedules, and profit calculations, but they are rendered in matter, labor, and machines. The sheer material bulk of the Panama Canal expansion refutes a purely economic understanding of the project. On the Pacific side, new access channels have been carved through basalt, sandstone, shales, and siltstone; meanwhile, oceanic channels on both sides have been deepened and widened. 12 Inland work includes dredging of the long underwater channel through Gatún Lake and the Culebra Cut. Then there is the massive earthmoving required for the new locks. All told, workers will blast, dredge, and excavate around 150 million cubic meters of earth, more than half as much as the original canal construction. 13

Scale comparison of Panamax and New Panamax specifications. [Diagram by Julia Gold and the authors] 

China Harbour Engineering Company Ltd. is already in talks to build a fourth set of locks costing $17 billion and capable of handling on-order-but-as-yet-unbuilt 20,000 TEU ships.
That would allow China to make full use of this sucker:

Yangshan is part of the Port of Shanghai. It is very big
(click here to enlarge, seriously, click through and click again)

The second ship under the cranes, Evergreen's Ever Respect, can haul 4,229 Twenty-foot Equivalent Unit containers. The new ships are almost five times larger.