Focus on Transportation: Panama Canal Expansion

The Soy Transportation Coalition (STC) visited one of the most consequential links in the agricultural logistics chain during the organization’s December annual meeting in Panama.

Approximately 100 U.S. soybean farmers and staff members of soybean associations participated in the annual meeting and later toured the Panama Canal and received an update on the canal’s expansion from the Panama Canal Authority. Jeremy Freking, Executive Director of the South Dakota Soybean Research & Promotion Council (SDSRPC) and Matt Bainbridge, farmer from Ethan and SDSRPC director, attended the meeting from South Dakota.

While in Panama, the group toured the current canal locks on both the Atlantic and Pacific side of the country. In addition, participants were able to view the new expanded canal locks that are scheduled to be open for use in April of 2016.

“It is incumbent upon farmers to not only be knowledgeable of and passionate about the supply and demand side of their industry. Farmers must also be knowledgeable of and passionate about the transportation system that allows supply to connect with demand,” explains Mike Steenhoek, Executive Director of the Soy Transportation Coalition. “The Panama Canal – both the current and future expanded canal – is an important artery that allows the U.S. soybean industry to be so competitive in the international marketplace. Farmers need to understand this key link in our logistics chain, which will hopefully serve to increase our resolve and motivation to demand that our nation appropriately invests in our own transportation system. If we fail to make these investments in our ports, inland waterways, railroads, and roads and bridges, the expanded Panama Canal will truly be a missed opportunity.”

Approximately 600 million bushels of U.S. soybeans annually transit the Panama Canal – the number one U.S. agricultural commodity utilizing the canal. Recent analysis – funded by the soybean checkoff – examined the impact of the Panama Canal expansion on U.S. agriculture. The analysis highlighted that one of the immediate beneficiaries of the expansion will be bulk commodities, like agricultural products.

The below map from the report highlights how sizable areas of the country could experience greater access to the efficiencies of barge transportation subsequent to the Panama Canal expansion. According to the research, the draw area to the nation’s major navigable waterways could expand from 70 miles to 161 miles. As a result, there will be increased areas of the country that will be able to avail themselves of the inland waterway system. The demand for barge loading facilities along the country’s major rivers will likely increase. The 111 mile line would be the expanded draw area from loading a “Panamax” vessel to a 45 foot draft in Southern Louisiana. The 161 mile line denotes loading a small “Capesize” vessel to a 45 foot draft.

To access the Panama Canal report or to learn more about the STC, visit its web site at www.soytransportation.org.

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Established in 2007, the Soy Transportation Coalition is comprised of thirteen state soybean boards, the American Soybean Association, and the United Soybean Board. The goal of the organization is to position the soybean industry to benefit from a transportation system that delivers cost effective, reliable, and competitive service.