Not quite in time for its 100th anniversary, the Panama Canal is undergoing a widening project that may generate a cascade of changes for American ports and distribution systems.  Higher fuels costs are pushing shippers to use larger, slower vessels.  Access to the canal would make the trip to East Coast or Gulf Coast ports only about two weeks slower than delivery to the West Coast, and slightly cheaper; what's more, it avoids the increasing problems of congestion in West Coast ports.  Norfolk, Virginia, already can accommodate 50-foot drafts.  Charleston and Savannah have plans in place for deeper-water ports.  All these southeastern ports have some cost advantages over New York, whose sky-high real estate costs require costly drayage to send goods to Pennsylvania or New Jersey for storage before ultimate transport.  The Gulf Coast, I'm afraid, is bringing up the rear, but there are possibilities here as well.

When I was a kid in school, they were always trying to teach us about distribution systems, but I never could understand how anyone could be interested.  I suppose I thought everything magically appeared where people needed to use it.  Now the process fascinates me:  all that intricate balancing of supply and demand, speed and cost, so vulnerable to disruption and so ready to repair itself if allowed.  I'd love a chance to pick the brain of the supply analyst who's quoted at length in the linked article; he seems to have a birds-eye view.

H/t Photon Courier.


Grim said...

This is very important stuff. Logistics isn't everything, but it sure is a big chunk of everything.

E Hines said...

An army travels on its stomach, some old dead general once said.

So do nations and their industries.

Another advantage of the Southeast is all those right-to-work states, with the chance of reduced port closures by unions, like we've seen within the last couple of months on the West Coast.

Eric Hines

Eric Blair said...

"Amateurs study tactics: Professionals study logistics" or so I was told ad nauseum.

But as banal sounding as that might be, it's still true enough.

It's why the Suez canal was so important once, and why the Panama canal was built in the first place.

I read a book by a guy named Nicholas Negroponte during the first flush of the internet, and he seemed to be asserting that the economy would soon be one based on electrons--(that is, information) but even then, I thought he'd made a big mistake--the economy is still based on moving around atoms (that is, stuff) for whomever want to buy or sell it.