Panama is building a third set of locks with two new complexes in the Atlantic and Pacific sides of the Panama Canal, as well as a third lane for large vessels, where each lock complex will have three steps.
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Panama inaugurated the long-awaited Panama Canal expansion on Sunday with the ceremonial transit of the China Shipping Panama through the new neopanamax Agua Clara locks on the Atlantic side.
The expansion work was carried out since 2007 and finished two years late at a cost of at least 5.5 billion Dollars.
“The expansion provides us with more options, most notably to our Asia to South America and Asia to U.S. East Coast routes”.
They are capable of carrying up to 14,000 cargo containers, about 2.5 to 3 times more than the Panama Canal was able to accommodate prior to the expansion project. It is an honour to announce that what we did, we did it together: providing this great connection to the world.
The Port of Seattle is trying to get approval for a $200 million dollar expansion that would double the number of mega-container ships the port could handle.
“It’s important to remember that the canal does not create demand”.
For his part, Anders Boenaes, vice president at Maersk, the world’s largest shipping company says Panama had to expand the canal to stay competitive. “What is certain is that the current canal has maxed out”.
But, he told AFP on Saturday, the canal itself is “one of the engineering wonders of the world” and it “will have a huge impact on trade”.
In addition to the widened Panama Canal, another massive canal, the Grand Interoceanic Canal of Nicaragua, is now in the early stages of construction. At the Suez Canal, a rival of the Panama Canal whose expansion construction work was completed in August 2015, the freight volume rose faster, at about 9 percent over the same period.
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A drop in oil prices has also impacted on global shipping. Previously, the canal could not cope with the flow of goods. “There is very little a larger canal can influence at the margin to induce shifts in the geography of world trade, even through potential reductions in costs of shipping a variety of commodities to, from and within the Americas”. According to the AP, the Panama Canal accounts for 40 percent of the country’s gross domestic product, or around $10 billion in revenues annually.
