Why are they widening the panama canal

Officials say that this is only the beginning, suggesting that the most significant employment impacts will be medium- to long-term.

This is because they will stem from the economic growth stimulated by the extra revenues generated by the expanded canal, and the rise in economic activity due to increased canal cargo and vessel transits. Despite these benefits, however, there are still many concerns over the design and viability of the canal in the long-term, as we shall see below.

There are a number of environmental concerns around the Panama Canal extension project. Notably, there are worries over whether there will be enough water in the canal for such large ships. In other words, if the water is not deep enough, the giant container ships for which the expansion was specifically designed will not be able to transport their large loads of shipping containers through the waterway.

While annual rainfalls are generally high in Panama, they are not guaranteed, especially in the era of climate change and increasingly erratic weather patterns. Whatever the reason, however, the water shortage meant that the Panama Canal Authority was forced to implement precautionary measures, introducing weight limits for ships coming through the existing locks at least 3 times during that year These three basins, which operate via gravity, fill and empty into each of the three new locks, reusing up to 60 percent of the water that passes through them.

Even with these super-sustainable recycling basins, the canal is still relying on its main source — the artificial Lake Gatun — to provide twice as much water as before, now that the new locks are in use. Eric Jackson, editor of the online Panama News, argues that the canal expansion is potentially contaminating an important source of human drinking water, pointing to studies by Delft Hydraulics , WPSI Inc.

It is difficult to know the extent of the risk of contamination here; while Jackson has some evidence to back up his claim the above reports , one of the leading environmental organizations in Panama, the National Association for Nature Conservation ANCON , conversely argues against him.

They say that the salinization level of the waters of Gatun Lake will be very low and consequently not a problem. However, more and bigger ships translate into a greater amount of diesel and petroleum being transported through the waterway, posing a heightened pollution risk in the event of a casualty.

Aside from environmental and viability concerns, there are also further risks that come with the expansion of the canal. There are strong concerns over the chances of accidents happening in the expanded Panama Canal because of its narrowness. Some industry bodies have suggested that at m long and only 55 m wide, the new locks are actually too small for the New-Panamax ships to safely pass through. For context, the largest vessels can measure up to m long and 49 m wide, leaving a distance of just 6 m across the width of the canal free.

The margin of error for navigating the new locks is therefore minimal. These tugs will be in the lock chamber with the vessel that is locking through, meaning that, in addition to the tightness of the canal, the tubs contribute to additional potential for increased contact with the lock walls.

Water seepage is also a concern. Water pouring through the cement walls of the new locks was one of many problems that delayed the opening of the Panama Canal expansion. Granted, this is good news for shippers in the Southeast, since more freight is being delivered to population centers in the East. It also puts the Midwest very much in play, as Savannah, for example, is 1, miles closer to Chicago than Los Angeles.

If you are interested in determining whether or not rerouting your cargo from the West Coast to the East via the Panama Canal would be beneficial to your business, contact the Averitt International team at international averittexpress. We will examine your current strategy and help you identify opportunities to save time and money across your supply chain.

Email Us Today. First, a Little Background. Capacity Implications The original locks were built to accommodate Panamax ships carrying roughly 4, TEUs twenty-foot-equivalent units. Domestic Impacts Nearly 70 percent of all cargo that passes through the Panama Canal either originated from, or is headed toward, the United States.

Supply Chain Take-Away Without a doubt, these are the kind of numbers that should make shippers sit up and take notice. Previous Post.

Next Post. Submit a Comment. Stay up to date. Learn More. It's been more than two years since the expanded canal opened for business. Has it lived up to its billing? But whether the expansion is truly a game changer for international traders is less certain. Some industry segments have already seen a major beneficial impact, but for others, the jury is still out. The Panama Canal expansion was designed to accommodate the growing number of container and bulk ships that are too large for the original infrastructure.

The project included the construction of a set of new locks, on both the Atlantic and Pacific ends of the canal, that are 70 feet wider and 18 feet deeper than the locks in the original waterway. A massive excavation created a second, larger lane of traffic, essentially doubling the canal's capacity. The original canal continues to operate, handling Panamax-size meaning ships of the maximum length, width, and depth that can be accommodated by the original infrastructure and smaller vessels.

The "Neopanamax" size for the new lane is approximately 1, feet long, feet wide, and 47 feet deep. The lane has handled containerships that are nearly that size and have capacities of more than 14, containers, measured in foot equivalent units TEUs. Some ships will still be too large, but the canal authority known by the Spanish acronym ACP says it can now accommodate 96 percent of containerships currently in service.

Panama, which has built its economy around the canal's role as an efficient route connecting Asia, North America, and Europe, will be the primary beneficiary of the expansion. Perhaps the first to see direct benefits from the expanded canal were bulk ocean carriers.

Liquefied natural gas LNG and other giant bulk vessels can now pass through Panama, reducing both transit times and operating costs compared with some of their traditional routes. This new user class contributed to the canal's 9. Container business is on the upswing too. The expanded canal has so far attracted 16 new container services, and in August , the canal set a record for monthly container tonnage, said Argelis Moreno de Ducreux, head of ACP's Liner Services Segment, in an interview published in the canal's monthly e-newsletter.

Since the expansion, she added, the average size of containerships transiting the waterway has increased by 28 percent. ACP's figures indicate that some carriers are moving more containers with fewer, bigger ships, suggesting that carriers are seeing lower operating costs per container. That may be true, but some observers believe the expansion's net beneficial impact on carriers' costs may be marginal.

For example, Panamax containerships pay transit tolls of as much as half a million dollars. Tolls are based on a ship's type, tonnage, and payload, so bigger ships pay more. Even if they operate fewer ships, carriers could still pay as much in tolls as they did before. Faster all-water transit times from Asia compared with the Suez route are often cited as a cost advantage for carriers using the Panama Canal, but that's not necessarily the case, say some analysts.

Theodore Prince, chief operating officer of the intermodal service company Tiger Cool Express , for one, expects bunker costs will be one of several factors determining whether big ships transit the Panama Canal. Fuel is the only significant variable cost for ship operators today, he says, and the biggest containerships "only save money when they're moving.