Let's not mince words. The addition of a third set of locks to the Panama Canal is a very big deal indeed. It's going to transform the way that U.S. traders move their goods to market. Whether it poses a dire threat to West Coast ports and intermodal providers is another question entirely.

The shipping world is bracing for 2014, when the new and expanded canal is due to open. (Let it be noted, by the way, that the $5.25bn project is on schedule and under budget - an achievement of which few American construction projects can boast. For comparison's sake, think of Boston's Big Dig, the tunnel and highway artery construction job which was years late and will ultimately cost taxpayers some $22bn, according to the Boston Globe. Perhaps we should put some Panamanians to work on our crumbling U.S. infrastructure?)

Currently the Panama Canal is able to accommodate ships up to 965 feet long and 106 feet wide, requiring a draft of 39.5 feet. For container vessels, that translates into a capacity of between 4,000 and 4,500 twenty-foot equivalent units (TEU). The new locks will take ships of up to 1,200 feet in length, 160 feet in width and 49 feet in draft. Containerships of up to 12,000 TEUs will be able to squeeze through the new channel, although the typical ship will more likely be in the range of 8,000 TEUs, according to Jason Bittner, deputy director of the National Center for Freight and Infrastructure Research and Education (CFIRE), which is headquartered at the University of Wisconsin-Madison.

That's large enough to make a sharp difference in the economics of container shipping. Take that 4,000-TEU "Panamax" ship, providing all-water service from Asia to the U.S. East or Gulf Coast. According to a study by Worley Parsons, that relatively small vessel has a competitive advantage over services moving through West Coast ports within an area that contains 46 percent of the nation's population. The effective service region for the 8,000-TEU ship, by contrast, extends to 63 percent of American consumers.

So you can expect the new canal to result in even more diversions of cargo to all-water, at the expense of West Coast gateways and intermodal service. Bittner quotes estimates by the Panama Canal Authority (ACP) that the economies of scale offered by post-Panamax ships transiting the canal will result in transportation savings of between 7 and 17 percent. And if oil prices continue to soar, expect shippers to make even greater use of the fuel-efficient all-water option.

Can we assume, then, that West Coast ports, having captured the lion's share of U.S. imports from Asia over the past couple of decades, are now fated to lose huge volumes of business to their East Coast competition? Not so fast. There are a number of factors that will keep them relevant many years into the future. One is tied to the very nature of these new mega-ships. Sure, they're cheaper to run on a per-unit basis, assuming that you can fill enough slots with paying cargo. But how many ports are capable of handling them?

"That's the question everyone wants an answer to," says Bittner. Only one major port on the Eastern seaboard - Norfolk, Va. - has natural deep water of 50 feet or more. The ports of New York/New Jersey and Miami have launched projects to deepen their harbors in time for the new canal's opening. Others, like Charleston, S.C. and Savannah, Ga., are angling for a piece of the action as well. Unfortunately, given the need for the big ships to limit their calls within each region, there's only so much business to go around.

Don't forget the new cranes and berth expansions that will be needed at dockside. For ports, finding the money to maintain existing facilities and channels is tough enough these days; never mind the huge amounts of capital that are needed to pay for a major expansion. "Ultimately," says Bittner, "there will be only a couple of active players [on the East Coast]."

Consider also the enormous improvements that must be made to inland infrastructure, in support of the mega-vessels. It's true that U.S. railroads have been pouring money into their networks to handle double-stack unit trains, especially in the eastern half of the country. Bittner says their annual expenditures since 2004 are equal to ACP's entire investment in the canal expansion. But carriers pushing thousands of additional containers into the interior from the East still must deal with the poor condition of the nation's highways, as well as with capacity constraints on inland waterways.

One proposed solution involves the construction of giant load ports in the Caribbean, linked to various East and Gulf Coast facilities via smaller feeder vessels. "A lot of investment is being poured into new terminals in Panama, Freeport in the Bahamas and Kingston [Jamaica]," says John Carver, executive vice president of Jones Lang LaSalle, a real estate services firm. But that kind of setup would involve an additional transfer of the container, which is precisely what all-water services were designed to avoid.

Even with the high cost of fuel, time is still of the essence to many manufacturers and retailers. Already linehaul carriers are slowing their ships to save on fuel, a controversial practice that has stretched out order cycles and increased shippers' inventory expense. How much additional time in transit will they tolerate, even with the cost advantage of all-water? Bittner says high-value consumer goods will continue to flow through the West Coast, to meet demands for rapid replenishment. "That's the way that retailers have their business model set up."

Don't forget the inherent market strength of the ports of Los Angeles and Long Beach, which together service a huge local market across Southern California and the Southwest. Approximately 40 percent of imports moving through over the ports' docks are destined for interior locations, but that still leaves plenty of goods with no other logical point of entry into the country. "There's a population base of 40 million within a day's drive [of the two ports]," notes Carver.

Finally, there's the question of just how much more business L.A. and Long Beach can handle, given that both have nearly maxed out on available acreage and would have to match the productivity levels of a Hong Kong or Singapore to withstand a long-term spike in volumes. I suspect that nearby residents, faced with even more trucks, trains and noise, would have something to say about that.

Bottom line: when it comes to weighing the competitive impact of an expanded Panama Canal, don't count anybody out. "We don't really see any losers," says Carver. "We just see greater winners."

Next: How the canal expansion could deliver a shot in the arm to the nation's ailing commercial real estate sector.

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