The Panama Canal Expansion Project is the first major renovation the canal has undergone since its opening in 1914, and when it opens in April, it means the canal will be able to accommodate a new line of vessels that were too large to pass through before—ships that can carry about double the tonnage of the ones the Panama Canal could accommodate previously. By offering a new alternative to American manufacturers and distributors, the opening of the greatly expanded Panama Canal next year will roil North American logistics and reshape the way companies get their products to business customers across the U.S., as well as reboot how many vendors approach the entire Western Hemisphere market. “Now you can have these massive ships go directly to the East Coast, and that is going to drastically change the way merchandise is distributed,” said Carla Lopez, head of research in Latin America for CBRR Group, a commercial real estate services and investment firm. Or, as Boston Consulting Group has put it, “The $5-billion project promises to reorient the landscape of the logistics industry and alter the decision-making calculus of the shippers that the canal serves.” Specifically, BCG said, “Companies accustomed to shipping to the West Coast and relying on relatively fast rail service to reach much of the U.S. are likely [now] to take a much more segmented and dynamic approach. When time is of the essence, as it is for some products, that routing may continue to make sense. But for other products, the cost savings of shipping through the Panama Canal will likely outweigh the extra time in transit.” “Shippers need to do the analysis. There is no shortcut,” BCG warns. “The exercise might show that it makes sense to open or expand East Coast distribution centers. It almost certainly […]