(June 28) A $5.3 billion plan to expand the Panama Canal would double tolls during the next 20 years, but the mammoth project could offer some big benefits for shippers.

“We expect increases in tariffs but also the possibility of using bigger vessels and also a shorter transit time, compensating (for) the tariff increases,” said Ronald Bown, president of the Chilean Exporters Association, Santiago.

Chile sends more than 90 million cases of fruit through the canal each year headed for the U.S. East Coast, Europe, the Middle East and eastern ports of Latin America, said Tom Tjerandsen, marketing manager for the Chilean Fresh Fruit Association, Sacramento, Calif.

Produce from Peru and Ecuador — including Chiquita bananas — also transits the canal. According to the Panama Canal Authority, more than 3.3 million tons of bananas and 1.1 million tons of refrigerated fruit made the eight- to 10-hour trip through the canal in 2004.

Proponents say expansion is vital for the 92-year-old canal because of the increasing size of ships. Post-Panamax vessels, which are longer than four football fields and cannot fit through the canal, represent 27% of the world’s containerized maritime shipping capacity. The canal authority said that number will increase to 37% by 2011 based on existing shipyard contracts.

“Without expansion, the Panama Canal will decline in relative importance for the U.S. East Coast market,” said Jessica Kubacz, spokeswoman for Madison, N.J.-based Maersk Inc., a division of Denmark-based Maersk Line.

About two-thirds of the canal’s traffic is headed to or from U.S. ports, according to USA Today, but Kubacz said there were 391 post-Panamax vessels greater than 5,200 TEU, or 5,200 20-foot equivalent units, that can’t call on U.S. East Coast ports via the canal. One TEU is the amount of cargo that can be carried in a 20-foot shipping container.

The proposal, released by the canal authority in late April, calls for a third set of locks, which would be deep enough and long enough to accommodate post-Panamax vessels, which can transport more than twice as much cargo as the Panamax ships that fit the canal’s current dimensions.

Kubacz said Maersk Line shipped 1,150 FEU, or 40-foot equivalents, of produce through the canal from June 2005 through May. However, it is unclear how much of an effect the canal’s expansion will have on the produce industry.

“There is no doubt that vessels have become bigger and that they will likely grow more in the future,” said Frederik Berling, spokesman for Copenhagen, Denmark-based A.P. Moller–Maersk A/S, Maersk Line’s parent company. ”However, there is also a continuous need for smaller and mid-size ships, especially to support global networks that include multiple smaller ports.”

Bryan Silbermann, president of the Newark, Del.-based Produce Marketing Association, said that if produce companies do shift to larger vessels they might have to adjust their port facilities, infrastructure and truck availability to accommodate larger shipments.

“It’s not as simple as, ‘Let’s build a bigger pipeline and bring in more fruit,’” he said.

Silbermann said the “produce fleet” was built with the size limitations of the canal in place.

“I don’t know of anyone gnawing at the bit to go out and build bigger ships,” he said. “I’m not aware of a shortage of supply going through the canal.”

The canal authority, however, says the canal is operating at 85% of capacity and will reach its maximum sustainable capacity in the next six years.

The expansion project would include excavation of a new navigation channel that would connect new locks with the existing channels, which would be deepened and widened. It also would elevate the level of Gutan Lake, which supplies water to the canal. The existing waterways would remain in operation during construction and after the expansion is complete.

The project is expected to take seven to eight years, and the new locks could begin operating as soon as 2014.