Gilbert B Norman wrote:Allow me to expand on some of the thoughts presented here. First, in view of that not everyone here has an employment history within the maritime industry (I don't) or for that matter even interest (I do), let me define the term PANAMAX. It simply means "PANama canal MAXimum" and that is the maximum dimension a vessel may have in order to transit the Canal.
Now regarding railroads, the BNSF likely has more to lose than the UP from any diversion of Container traffic sway from the Port of Los Angeles/Long Beach, this is because BNSF owns the "Transcon" - the former ATSF line that is largely double tracked, comparatively grade-free, and by freight standards, a high-speed railroad (HSR of sorts). Their marketing to the maritime operators is that with high value merchandise (the "must have' toy; whatever), is more valuable with a shorter pipeline owing to BNSF's greater speed. BNSF has invested heavily (investor funds) to provide greater capacity on the strength of increased business through the Port of LA/LB.
Now with the expansion of the Canal so that it will be able to handle any container vessel afloat (some VLCC - Very Large Crude Carriers in range of 650KDWT will still be excluded). and with expansion of East and Gulf Coast Ports, traffic formerly routed through LA/LB and providing BNSF or UP with a Transcontinental line-haul, will now be landed through these latter ports - and reducing the need for railroad transportation to handle containers to destination. Eastern carriers, CSX and NS will benefit, but not to the same extent as BNSF and UP will lose.
Note there are already containerships afloat that will still be Post-Panamax even when the new locks are completed. New Panama Canal locks are 180 ft. wide, while the Maersk E class Containerships (Emma Maersk and sisters) are 186 ft. wide, and the Maersk Triple E Class that are on order will be 194 ft. wide
I'd like to think Warren factored the PANAMAX development into placing his bet. The bet is that there will be continued increases in import (and maybe even EXport) traffic as the century progresses and that LA/LB that now has vessels deliberately "slow steaming' simply because they cannot dock will see this condition alleviates - in short, there will be enough business for all.
Slow-steaming isn't to await dock space, it is to lower fuel consumption. With the high cost of Bunker Fuel, and Fuel costs are the largest component of containership costs, slow-steaming can save 20% of the fuel cost per voyage, which is a big deal.
Finally, away from the BNSF, let us consider the bet Kansas City Southern has placed; this one is the wild card. With the acquisition of the NdeM from the Mexican government, KCS is betting that still undeveloped ports can offer the "cheap labor', along with operational efficiencies simply not realized in a government run operation, and offer a rate competitive shipment to any point in the US. It will be interesting to watch those cards being dealt.
KCS has access to only a single port on the Pacific Ocean, Lazaro Cardenas, which is south of Mexico City. The port has significant potential but it is expected to mainly handle Auto Parts for Mexican assembly plants, not consumer goods for the US. It is a long way from Lazaro Cardenas to Laredo, TX and is across the Sierra Madre Mountains with serious grades. More of a threat would be a port in the Northern Baja California, south of Tijuana, the problem with that is that it would require significant new railroad construction over terrain that isn't mountainous, but it definitely isn't flat either. The National Railway of Mexico was split into four parts, Ferrosur in the south, Ferromex in the North and West, TFM (now KCSdeM) in the North and East, and Ferrovale (a neutral terminal railway serving Mexico City). KCS de M serves the Matamoro (Brownsville, TX) and Laredo, TX gateways, with Ferromex serving all the gateways further west (Eagle Pass, El Paso, Bisbee, and Tijuana). The UP owns 26% of Ferromex.
Gilbert if you want to understand the why containers move through some ports and much less so through others I would like to recommend that you read this scholarly study by
Dr. Robert C. Leachman of UC-Berkeley
In addition Dr. Rob is also a railfan and authored the book "Northwest Passage" covering the Burlington Northern in Oregon and Washington in the '70s and '80s. He took most of the photographs too.