The Future of Global Trade

The future of global trade is bright.  Another sign of the continuing growth of global trade appeared recently at a dock at the port of Bayonne, New Jersey.  On June 26, 2016, the long-awaited expansion of the Panama Canal was completed.  The expansion was necessary in order to accommodate so-called mega-ships.  These mega-ships are able to carry more than twice as many containers as before.

On July 8, 2016, the first of these mega-trips arrived in New Jersey from China through the newly widened Panama Canal.  The MOL Benefactor with a capacity of about 6,000 containers was the first of these ships to use the expanded canal, but it certainly won’t be the last. Expectations are for these larger ships to continue to call on the busiest port on the East Coast and other ports all along the East Coast.

Canal officials have stated that they have 170 reservations for these large ships to pass through the canal over the next three months.

Ports on the United States East Coast have been expanding their port operations to make room for larger vessels and more cargo going to rent from the Far East.  Previously cargo had to dock on the West Coast and then their containers had to be shipped by train or truck because of the canal’s previous size limitations.

American coal and grain industries are excited about the possibility of shipping their products to China and elsewhere in Asia cheaper and easier than before.

The Panama Canal is a man-made 48 mile waterway in Panama that connects Atlantic Ocean with the Pacific Ocean. It is a key conduit for international trade which began in 1881 by France.

The project was taken over by the United States in 1904 and completed in 1914.  A third wider lane was undertaken in September 2007 and recently completed.  Panama Canal has been called one of the “seven wonders of the world” for the American Society of Civil Engineers.

It takes six to eight hours for a ship to pass through the Panama Canal. It was created to allow for ships to avoid the long and sometimes treacherous journey around the tip of South America.  The Panama Canal continues to serve more than 144 of the world’s trade routes and the majority of canal traffic comes from the “all-water route” from Asia to the U.S. East and Gulf Coasts. Annual traffic through the canal has risen steadily from about 1,000 ships in 1914 to almost 15,000 in 2008.

Just another indication of the anticipated growth of international trade and the benefits that will flow to individuals and the companies that serve those individuals.  There are more than 12,000 publicly traded companies in 44 countries allowing individuals to own shares in their futures.

More countries and companies will be added to established stock market exchanges in the future as the so-called “Frontier Countries” are added.  A frontier market is a type of developing country which is more developed than the least developing countries, but too small to be generally considered an emerging market.  Examples of these countries are Nigeria, Vietnam, Argentina and Malta.  We do not invest in these countries for our clients.

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The foregoing content reflects the opinions of Crimmins Wealth Management and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.

About Dan Crimmins

Dan Crimmins, co-founder of Crimmins Wealth Management, is a financial coach and fee only financial planner. Have a financial question? ASK DAN


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