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Panama Canal expansion offers U.S. ports new opportunities

Xinhua, January 19, 2016 Adjust font size:

The expansion of the Panama Canal, set to be completed in early 2016, will offer new business opportunities to U.S. ports located in the southeast, such as Freeport in Texas, according to a Panamanian official.

Panama's Houston consul Juan Bautista Sosa recently spoke to Xinhua in the Panamanian capital of Panama City about the expanded waterway and what it means to the Mediterranean Shipping Company (MSC) and its proposed new shipping route from Freeport.

Sosa was in Panama to attend a business forum with 18 representatives from Freeport and the counties of Brazoria and Waller, located in west Houston.

The MSC's route includes Mexico, Central America, several Caribbean islands, and Panama's Caribbean port of Cristobal, where goods are loaded onto freighters.

Some 400 million U.S. dollars have been invested to extend Freeport's draft capacity from 45 feet (13.7 meters) to 52 feet (15.8 meters), so as to allow the port to accommodate larger cargo ships that can pass through the expanded Panama Canal, according to Sosa.

Ships from the Far East, said Sosa, used to arrive at the ports of Long Beach and Los Angeles on the U.S. West Coast, and then transport cargo inland via rail. At present, larger ships dock at Freeport more frequently with the Panama Canal route.

The president of Panama's Chamber of Commerce, Industry and Agriculture (CCIAP), Carlos Fernandez, said that Freeport's enlarged capacity will help increase Asia's exports to U.S. markets.

Currently, one of the four ships sailing into the Port of Houston comes through the Panama Canal, said Sosa. Yet thanks to the waterway's expansion and Freeport's initiative, one out of three ships to arrive in Texas are expected to come through the canal within 10 to 15 years, he added.

Once larger freighters start to pass through the canal, said Sosa, Texan companies will be interested in seeking business opportunities in Panama or other parts of Latin America.

Panama will also gain benefits from the expanded canal, said Sosa, since Freeport and other Texan ports, such as Port Arthur in Houston and the port of Corpus Christi, have liquefied gas terminals to export energy resources.

The Texan delegation is set to travel on Tuesday to Panama's Manzanillo International Terminal, located in the east of the canal's Atlantic opening, in a bid to explore business opportunities for part of the MSC's new route.

In 2015, Houston's port handled 8 percent more shipping containers than that of the previous year. Yet the expanded Panama Canal is set to boost business by as much as 50 percent.

Currently, Houston handles some 2 million TEUs, or Twenty-feet Equivalent Units, of shipping containers, every year. But that could reach 3 million TEUs in five years, according to Sosa.

"The maritime sector recognizes Panama's interest in expanding the canal with its own funds," said Sosa. Endi