Explain The Panama Canal Modernization

1622 WordsNov 8, 20177 Pages
Introduction: In this assignment I will first explain the Panama Canal modernization and then I will discuss about the industry experts/forecasters prediction about its impact on east and west coast of U.S. followed by the detailed analysis to evaluate the accuracy of the prediction. Furthermore, based on the analysis, I will present my opinion for rejecting or agreeing with the forecaster’s prediction of the panama canal’s positive impact on intermodal traffic market share of east coast ports and west coast ports, western railroad of U.S. Overview: The Panama Canal expansion is one of the biggest developments in maritime trade in last few decades. When the canal first opened in 1914, it reduced 8,500 miles and several weeks of transit…show more content…
ports to gulf or east coast U.S. ports as a result of Panama Canal expansion. Most businesses in the area numbered as 5, currently rely on West Coast ports to receive goods namely Los Angeles-Long Beach, Oakland, Seattle, and Vancouver. After the Panama Canal expansion, shipping through the East Coast will be especially attractive to businesses that are more price-sensitive and less time-sensitive. Therefore, for companies in the 5th region, it will become cheaper to handle goods through East Coast ports, although doing so will add a few weeks to the total transit time but a justification for this potential switch will highly depend on a company’s time preferences, price sensitivity, and costs of working capital. Thus, there is a prediction from forecasters that, that West Coast ports and western railroads would see a significant drop in intermodal traffic market share. Eastern and Southern ports and railroads, on the other hand, would see a corresponding increase. Analysis to find out accuracy of the prediction: So, after 18 months, is the prediction
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