East Coast vs. West Coast: The impact of the Panama Canal’s expansion on the routing of Asian imports into the United States

• Small reductions in transit time result in substantial increases in shipments transiting through a port.
• The Panama Canal expansion will shift Asian-originating cargo from US West Coast to East Coast ports.
• Greater increases to East Coast ports are likely to come from East Asia compared to the rest of Asia.
• Increases in shipments to the East Coast ports will vary by commodity type.

Asian firms shipping to inland US points choose between West and East Coast ports. West Coast shipments often have lower transit times but higher freight charges. To investigate factors affecting this routing decision, a coast choice model is estimated. Results are then used to project shifts in demand with the coming completion of the Panama Canal expansion. Our simulations show that if the Panama Canal expansion generates significant transit time savings on shipments from Asia, as projected, that there will be major shifts in traffic from West to East Coast ports, raising important policy implications for port operators on both coasts.