Panama Canal project could increase freight shipments, but are companies prepared?

American trucking could be on the rise in the coming years, as the expansion of the Panama Canal will likely increase the number and size of shipments making their way to the United States. However, some fear domestic transportation companies may not be able to handle the increase in business if they don't start to prepare in advance.

Expansion plans will impact transit
The Panama Canal is currently undergoing an expansion project that is projected to double its capacity by allowing larger ships carrying more cargo to pass through. The project, which is slated to be finalized by 2015, could bring a substantial amount of new business to the country. To accommodate the increased number of shipments that will be traveling via the waterway before heading to the U.S., American ports are already making adjustments and ensuring they will benefit from the additional business.

Will transportation companies be able to cope with more business?
Water transportation providers are already making the necessary adjustments, but the canal expansion could also have a rather unexpected impact on the North American trucking industry. With larger cargo loads being shipped through the canal and reaching American shores, more vehicles may be necessary to get these products to their final destinations. Some doubt the industry is ready for this increase in business, but American Trucking Associations Vice Chairman Phil Byrd disputed that claim in testimony he recently gave to the Senate Commerce, Science and Transportation Committee.

"We are aware of no systemic trucking capacity shortages that are currently impacting freight movement at our port facilities or could serve to restrict the transport of Panama Canal increased volumes beginning in 2015," he said.

However, there has been concern voiced about deteriorating infrastructure, driver shortages and new industry rules that have the potential to limit services when more cargo needs to be moved. To mitigate these risks as more cargo ends up in American ports, distribution companies may need to analyze and enhance their current networks and capabilities. In addition, company leaders who wish to participate must determine how they can take advantage of the increased amount of shipping opportunities the expansion will provide. By correctly optimizing their local, regional or long haul routes based on the greater amount of cargo in certain ports, transportation companies can better manage the movement of freight shipments. With vehicle routing software, a company can enjoy the benefits of more business opportunities, less time spent planning routes and lower expenses.