Power of the Ports
After more than 10 years of dredging and construction, the $5-billion Panama Canal expansion opened a year ago. It doubled
the storied canal’s capacity by widening and
deepening the channels to make room for ships
nearly three times the size of what had been able
to pass through the original canal. Subsequently,
Panama Canal executives predict a 16% to 17%
revenue increase in 2017 alone.
At the same time, the retail industry is seeing a
growing reliance on e-commerce. The e-com-
merce industry will surpass $2 trillion in revenues
in this year, according to a Forbes report. And
market research firm eMarketer puts that figure
even higher by 2020, predicting e-commerce
sales will rise to $4 trillion by 2020 and account
for 14.6% of all consumer retail spending.
The potential impact is staggering. In its 2016-
2020 Port Planned Infrastructure Investment
Survey, the American Association of Port
Authorities asked its US member ports how
much they and their private-sector partners plan
to spend on port-related freight and passenger
infrastructure over the next five years. The
answer was $154.8 billion. AAPA then contrasted
that number with what it believes is the “
best-case” scenario for investments by the federal
government into US ports, including their land-and water-side connections, through 2020. The
answer was just shy of $25 billion.
BY JENNIFER LECLAIRE
Investors are eyeing ports, but could potential restrictions on international
trade throw a wrench into the distribution segment’s engine?