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Essay On Panama Canal Expansion

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The Effect of the Panama Canal Expansion on Railroads The Panama Canal was created by President Wilson in 1913 as a means for water carriers to travel between countries and trade goods internationally. This was over 100 years ago now, and ships have increased dramatically in size. The expansion carries a hefty price tag of over $5 billion, but will allow ships that are over double the size of current carriers to pass through the locks (Fierman). With this change in accessibility, one must consider the effects of other shipping methods such as rail. Previously, goods would be brought to the western United States by water carriers and then shipped via rail to the eastern U.S. This was the most cost efficient option. With megaships now being able to pass through the canal, western rail companies could be severely impacted. One western railroad mentioned in the Business Insider article is BNSF. According to Nerijus Pokus, an international shipping expert, BNSF and Union Pacific could see a decrease in freight volume while eastern-based rail companies like CN and CSX could see a large …show more content…
Although freight volume may be declining for the west, the eastern coast ports are making infrastructure changes to their intermodal capabilities in order to handle the large volume of freight that will now be coming into their ports on these larger ships (Global). PortMiami, for example, is taking full advantage of the expansion by partnering with the Florida East Coast Railway (FECR) to provide “on dock intermodal rail service” to shippers. According to the Inbound Logistics article, FECR also purchased and built and 43-acre Intermodal Container Transfer Facility in order to store and transfer the excess cargo for their customers (Global). These two articles are just a brief look at the way the Panama Canal expansion is impacting the supply chain in general and specifically, rail

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