Wednesday, July 24, 2013


Last Sunday's NY Times included a lengthy story about the new Silk Road. Just when I thought that water transport had long eclipsed lengthy overland travel, it seems that the best way to get laptops from Chinese assembly plants to shops in Amsterdam is by train.

Trade begets development and development begets trade. That means both are dynamic and always evolving.

Closer to home, the Panama Canal expansion project is far along. I have found a surprisingly small number of studies that speculate on what this means for shipping and trade. Here is one of the few studies I have found.

Most of what is shipped uses more than one mode of shipment. If U.S. east coast-west coast shipping can more easily move by sea, what happens to U.S. rail and truck use? What about Pacific Rim trade bound for Europe, but that now traverses the U.S. by land routes?  As the use of the various modes changes, does business at the various trans-shipment nodes rise or fall?

But not so fast on mourning what will happen to U.S. overland freight.  Warren Buffett, who knows a few things about investing, made a big bet of trains several years ago. Just like the Eurasian Silk Road, our overland shipping may benefit from the new patterns that will emerge when the bigger and better Panama Canal gets going in 2015.