Panama Canal expansion ready for 2016

By Joseph L. Murphy

A U.S. destroyer and grain ship are pulled through the final locks of the Panama Canal. The expansion canal is ready to begin operations in 2016. (Photo: Joseph L. Murphy)

A U.S. destroyer and grain ship are pulled through the final locks of the Panama Canal. The expansion canal is ready to begin operations in 2016. (Photo: Joseph L. Murphy)

Information about the Panama Canal expansion took center stage during the Soy Transportation Coalition (STC) meeting in Panama this week. About 100 farmers, state soybean staff members, and others were able to get a briefing from canal officials about the progress of the vital shipping route for U.S. soybean farmers.

Ilya Espinoza De Marotta, the executive vice president of engineering and program administration with the Panama Canal Authority, told the group that April 2016 is still the expected completion date for the new expanded canal channel. The channel will enhance a system of locks that have been in place since 1914.

Mike Steenhoek, executive director of the Soy Transportation Coalition, told those attending the STC board meeting and the tour of the canal that it is important for farmers to see the canal first-hand.

“Farmers need to be acquainted with, knowledgeable and passionate about, not only the supply side of their business, but demand side as well. They need to be just as passionate about the connectivity between supply and demand,” Steenhoek said. “That’s what transportation is. That linkage or connectivity is the system of roads, bridges, highways, ports, inland waterways, railway systems and includes the Panama Canal.”

He went on to say that 600 million bushels of soybeans travel through the Panama Canal annually, making it the No. 1 U.S. commodity moving through the canal. Grains make up the largest cargo by commodity moving through the canal with petroleum and container cargo rounding out the top three according to numbers released by the Panama Canal Authority.

Those numbers are expected to increase once the canal expansion is completed. Canal officials told the group they expect the total volume of goods transported to double once the expansion project is complete.

“Currently, 70 percent of shipments through the canal either originate or are destined for the U.S.,” De Marotta said.

Ed Ulch, an STC board member and Iowa Soybean Association (ISA) director, also attended the meeting. He agreed with Steenhoek that it’s important for farmers to see the canal.

“This (the Panama Canal) is one link of the transportation chain, and we aren’t going to be able to take advantage of this unless we hold up our end of the bargain, so to speak,” Ulch said. “We need to do the things needed in the Gulf to be able to accommodate the big ships and the larger loads to be more efficient.”

Karey Claghorn, ISA chief operations officer, has visited the canal several times and echoed the importance of the waterway for farmers. During this trip, she was also able to see the importance of the canal when it comes to national security.

“In my opinion, food security is an important part of national security so the canal is critical to move products around the world,” Claghorn said. “But to see the Navy warship move through the canal, we also see the importance the canal plays in getting our military around the world in an efficient way.”

Originally published for the Iowa Soybean Association. Find more great stories at: www.iasoybeans.com/news

 

 

Harboring an investment in the future

By Joseph L. Murphy

A drive into the town of Aberdeen, WA, is telling in itself. Not more than 15 years ago, the town was down on its luck as logging companies and other manufacturers laid off workers; creating a region that could only boast of beautiful landscapes and the second highest unemployment rate in the nation.

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A dramatic turnaround started when farmers from the Midwest, state checkoff boards and AGP invested in a small port with big potential. That port, called Grays Harbor, is now responsible for millions of dollars in commodity exports every year. In the process, the area has erased much of it’s unemployment troubles and is becoming a booming town complete with Starbucks Coffee shops, Home Depot and many other businesses. It proves, once again, that agriculture not only can feed the world, but it can feed a starving economy, too.

I was able to tour the area last weekend and see for myself all of the positive impacts Iowa soybeans have had on the area and even a possible glimpse of the future.

Sitting at a welcome dinner while reflecting on a full day of touring the harbor and area towns with a group of Asian grain buyers, I enjoyed conversations and food with AGP representatives, commissioners from the Port of Grays Harbor and other officials.

“This tour has been great. Grays Harbor is a very important place,” Leo Liu, manager of shipping development for Jiusan Oils & Grains Industries Group in China. “When our ships come here, there are no lines so we can load them as soon as possible and that means we can get them back to China as soon as possible. That saves us money.”

Liu went on to say that the tour opened his eyes to the possibilities of his company investing money into the port to control the flow of soybeans they buy from the Midwest that come to the port and eventually to China. Liu also sees an investment in the port as a way to control unwanted foreign materials that are shipped to his country.

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Liu’s company imports about five million tons of soybeans from the United States every year. He believes that every Panamax ship carries about 1,200 metric tons of unwanted foreign material. Considering their yearly shipping amounts and foreign materials, he believes more than 100 vessels are used every year just to carry that waste. He would like to take the money being spent on those vessels and invest it in a grain silo or other infrastructure at the port to control the product they purchase.

“We pay that money for foreign materials, why wouldn’t we pay for an investment at Grays Harbor?” he asked.

When Chuck Caldwell, one of three elected commissioners at Grays Harbor, started in 2002 he said there were 12 ships a year using the port. This year, he said they are on pace to have 102 ships. According to Caldwell, the increase in shipping has allowed them to invest in infrastructure like rail lines and attract new business like auto exports.

“You know when you switch a light off in a room and it gets dark?” Caldwell asked. “When AGP came, the light came on and that’s what got us going here.”