Any Port in a Storm? Maybe Not in California Very Much Longer

See how a construction project at the Panama Canal will impact jobs here in the Golden State.

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port of los angeles

Sometime within the next two years, global shipping routes will undergo a massive reorganization.

That's because the Panama Canal will be widened to allow passage of super-sized container ships that currently are too big to go through the canal.

For now, the Panama's water corridor can accommodate ships with no more than about 5,000 containers. At the completion of the five-year project, the enlarged canal will be able to accommodate ships with up to 12,000 containers.

So what's all this global shipping stuff have to do with California? A lot more than you might think.

International shipping is big in California. Los Angeles is the busiest container port in the United States, while Long Beach is close behind in second place. Of the shipments that come to southern California from the Pacific, about half of the goods stay in California or nearby areas; the other half is shipped east via train or trucks.

All that translates into revenue and jobs. In fact, about a half million jobs are connected to the shipments in and out of the two ports.

Once the widened Panama Canal begins service, ships with goods primarily for ports in the Gulf of Mexico and east coast will be able to sail straight through to their destination, bypassing California ports altogether, and at a cost. Some business leaders in southern California believe that redirected container shipping could cost the region 25 percent of its current volume, and with that could go tens of thousands of jobs.

As ominous as things appear, there is a silver lining of sorts. While L.A.and Long Beach have spent resources expanding their capacities, other ports have not kept up. New York, Savannah, Georgia, Charleston, South Carolina, and Miami are not deep enough to accommodate the super-sized container ships. Norfolk, Virginia and Baltimore are deep enough, but lack the capacity to accept the larger container volumes.

Maybe there's an upside to fewer congressional earmarks.

Meanwhile, in the near term, California will continue to thrive because of the problems elsewhere. But once other ports catch up, California may find itself with a smaller slice of the shipping pie. Chewing on that possibility is an uncomfortable thought.

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