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How will the Panama Canal expansion impact the American trucking industry?

Written by Mike Leizerman Posted May 30th, 2013

As the Panama Canal expansion project nears completion and an unprecedented influx of goods are expected to begin arriving, stakeholders have questioned whether the American trucking industry will be prepared

Panama Canal expansion impact trucking industry

In 2006, there was a national referendum in the South American country, Panama, to vote on expanding the Panama Canal.  The vote was substantially in favor of expansion, and by 2015 the project will be complete.  The Panama Canal is a man-made canal which connects the Atlantic and Pacific Oceans, via the Caribbean Sea.

After its completion in 1914, the Canal dramatically altered the flow of goods by sea.  Boats no longer had to navigate around Cape Horn – the southern tip of the South American continent – to reach the Eastern or Western coasts.  Today, the Canal is critical in modern shipping.  For example, in 2009, 299.1 million tons of goods passed through the Canal.

So, what does any of this have to do with the trucking industry in America?  Well, the expansion of the Canal is expected to double its capacity. This will translate into a huge spike in container transport traffic to the American coasts. Early estimates projected that East Coast and Gulf Coast ports would see double digit increases in transport volume.  But a ship can only move the goods so far. This increased port traffic will demand more transport trucks to move the goods into the American interior.

This raises two interesting questions:

  1. Will the American trucking industry be ready to handle the spike in transport demand?
  2. And will the trucking industry be able to hire and train enough competent drivers so that the increased transport does not cause a corresponding increase in truck accidents?

The answers are disputed.  The trucking industry itself maintains that it is adequately prepared to handle the spike in volume.  On April 10, 2013, Phil Byrd, the President and CEO of Bulldog Hiway Express, testified before the Senate Commerce, Science and Transportation Committee on behalf of the American Trucking Association (ATA).  Bryd maintained that that the trucking industry is prepared for the increased traffic at American ports.  He said “At this time, we are aware of no systemic trucking capacity shortages impacting freight movement at our port facilities.”

But Byrd did not stop there.

Though he concluded that the trucking industry was prepared for the increase in port traffic, Byrd expressed concerns that the United States still faces challenges relating to the prospective transport boom. Byrd pointed to limitations of the ports themselves. He suggested that the ports  may not be adequately equipped to handle the influx of goods.

Byrd then went out to point out that American highway infrastructure is not be equipped to handle the increased volume.  Citing a recent study published by the American Society of Civil Engineers (ASCE), Byrd pointed out “that forty-two percent of America’s major urban highways remain congested, costing the economy an estimated $101 billion annually in wasted time and fuel.”   He noted that the report also indicated that though conditions had improved in the face of increased investments, even that higher level ($91B) was insufficient.

Byrd concluded his argument by highlighting that the ASCE gave the American highway system of a grade of D.

Before wrapping up though, Byrd also took the opportunity to criticize the hotly contest FMCSA hours of service (HOS) changes which have a July 1, 2013 compliance deadline:

“Driver resources remain a challenge.. Pending Hours of Service (HOS) changes, particularly restrictions related to the 34-hour restart, will negatively impact driver availability and productivity.. We will also be challenged by systemic port gate-terminal operational inefficiencies and real or threatened port labor disruptions.”

As a proponent of safety and as a truck accident attorney, I take what the ATA says with a grain of salt.  However, I happen to agree with Mr. Byrd on one of his points.  The crumbling infrastructure in America does need to be repaired. It is possible to make highway travel much safer.  If you recall, earlier this year, the National Transportation Safety Board released a “Most Wanted List” for improved safety.  One of the wishes on the list was for improved infrastructure.

I completely disagree that the HOS changes will encumber the industry, though.  The HOS changes are necessary, as truck driver fatigue continues to be one of the top causes of preventable truck accidents, killing and injuring thousands upon our highways.  Truck drivers are driving over HOS, and the resulting lapses in good driving judgment, delayed perception and reaction time, fatigue, and inattention are causing too many serious truck accidents. The HOS changes will help address the issue.

On a side note, I do find it interesting that Mr. Byrd maintains that the industry will be able to accommodate the increased port traffic, especially considering the national shortage of truck drivers.

It will be interesting to see how the trucking industry responds to this new development.  I just hope that truck companies and truck drivers alike embrace this new economic growth with safety in mind.  This is a wonderful opportunity for our country as a whole to build the economy, and a good time for the government to finance these major infrastructure projects when interest rates are at historic lows.

About Mike Leizerman

Michael Leizerman is a founding member of the Truck Accident Attorneys Roundtable and the managing partner at E.J. Leizerman & Associates. Michael litigates major trucking collision cases across the United States. He has co-counseled with lawyers in 18 states and has received several top-reported state truck accident settlements. Michael is the author of "Litigating Truck Accident Cases." He is past president of the American Association for Justice Truck Accident Lawyer Litigation Group. Michael lectures throughout the United States on truck accident litigation and works with other injury attorneys from across the country. Michael has a commercial driver's license.
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