Did the Panama Canal expansion benefit small U.S. ports?

Abstract

This study uses public data on U.S. container ports from 2000 to 2017 and a fixed effect model to investigate the indirect effect that the expansion of the Panama Canal may have had on the import volumes of relatively small ports in the Gulf and Atlantic coasts. The larger number of megaships going through the canal after its expansion increases the number of incoming containers for relatively large ports that are able to service these ships. This increase in traffic for large ports could indirectly affect the number of incoming containers for smaller ports depending on their proximity to these larger ports. Our results indicate that small ports close to a large port benefitted from the canal expansion, but only when they are very close. Examining broader definitions of proximity revealed that small ports that are much farther from a large port also benefitted from the expansion.