Impact of the Panama Canal Expansion in global supply chain: Optimization model for US container shipment

The transportation of containerized shipments will continue to be a topic of interest in the world because it is the primary method for shipping cargo globally. The primary objective of this study is to analyze the impact of the Panama Canal Expansion (PCE) on the trade flows of containerized shipments between the United States and its trade partners for US exports and imports. The results show that the Panama Canal Expansion would affect the trade flows of US imports and exports significantly. The major findings are as follows: (1) the PCE affects not only US domestic trade flows, but also international trade flows since inland transportation and ocean transportation are interactive, (2) delay cost and toll rate at the Panama Canal do not have a significant impact on trade volume and flows of US containerized shipments after the Panama Canal Expansion mainly because delay cost and toll rate at the canal account for a small portion of the total transportation costs after the PCE, (3) West Coast ports would experience negative effects and East Coast ports would experience positive effects from the PCE, while Gulf ports would experience no effects from the PCE, and (4) an optimal toll rate is inconclusive in this study because changes in toll rate at the canal account for a small portion of the total transportation costs and the PNC competes with shipments to/from Asia shipping to the US West.