Following nine years of construction at a cost of more than $5 billion, the opening of the Panama Canal is right around the corner, and the world is beginning to celebrate the significant improvements increasing the Canal’s capacity for carrying cargo between the Atlantic and Pacific oceans. The 9,400 TEU’s container vessel COSCO Shipping Panama began its two-week journey from Port of Piraeus in Greece to the Panama Canal for the waterway’s inauguration on Sunday, June 26. After winning the draw for the inaugural transit through the expanded Panama Canal last month, COSCO Shipping changed the name of the vessel’s original name from the Andronikos to honor the Panamanian people and this historic voyage through the new Canal. When the new locks slide open to accept this first authorized trip through the deeper navigation channels, hopefully, the entire, the global shipping industry will join in the jubilation. However, many may not realize how vastly different things may become after the expanded Canal officially begins services on June 27.
For example, the expansion ushered in a new era of infrastructure improvements at Ports in the U.S., Caribbean, and South America. To maximize the potential economic boom from the Panama Canal, nations in these areas sought billions to dredge deeper harbors and add additional supports for the loading and unloading of larger vessels. U.S. Ports cities on both coasts are tapping federal and state funds to upgrade facilities to remain competitive. Although U.S. West Coast Ports still hold an advantage in transit times, the Canal brings the possibility of Asian vessels circumventing these ports to dock instead at a Gulf Coast or Eastern Port. Unfortunately, the West Coast Longshoremen’s Strike and Port congestion issues might have had permanent damage after showing the shipping world there are several excellent alternatives at other U.S. ports.
The much-maligned expansion will not be free of challenges after the opening. The U.S. shale explosion increased the world’s demand for natural gas, and now, Panama will play a central role in the transport of liquefied natural gas (LNG). Although the Canal can now service triple the size of cargo vessels than before, the expansion does not provide enough capacity for the biggest container ships or crude tankers. Even though the locks are too small for some of the LNG tankers, the expansion is significant enough to allow for almost 90 percent of the natural-gas carriers world fleet to use the Canal. The new deeper channels can accommodate massive LNG tankers, saving 11 days and a third of the cost of the route from Asia. The strength of the global economy will determine the success of the Panama Canal expansion. Until that time comes, we can all revel in the fantastic upgrades of the Panama Canal and join the world in commemorating its opening.
Only a few weeks before inauguration, views from the Agua Clara Locks of the Panama Canal Expansion – Atlantic side.