Panama Canal Expansion

The $5.25 billion expansion of the Panama Canal will either dramatically boost East and Gulf Coast container trade or disappoint their expectations of gaining more cargo. But the opening of much larger locks in early 2016 is already boosting prospects for more exports to Asia from U.S. Gulf ports of LNG, coal and grain cargos.

What is certain is that the doubling of capacity on the connector of the Atlantic and Pacific oceans will change the way the world¹s shipping lines ply their global routes when the project is completed. The doubling of the canal’s capacity will allow shippers to bring their Asian goods to the Eastern and Gulf coasts for less money. That’s largely because the new locks will be able to handle larger vessels that can carry nearly three times as many containers. The project is also expected to bolster Panama’s strategic positions as a transshipment hub and business center for much of Central and South America.

For general developments at the Panama Canal, see also JOC’s Panama Canal News page.

Special Coverage

The Panama Canal has overtaken the Suez Canal as the favored transit route for carriers operating services between Asia and the US East Coast following the widening of the Central American waterway.

News & Analysis

16 Nov 2016
Scrap another 100 Panamax ships in the next couple of months if there is to be any rebalancing of supply and demand, Alphaliner warns.
14 Nov 2016
More larger ships expected as carrier alliances revise schedules.
20 Oct 2016
The Panama Canal Authority said increased rainfall has permitted an increase in maximum allowable drafts at the canal’s new locks.
13 Oct 2016
Container ship transits through the Panama Canal are running well below capacity following its $5.25 billion widening.
11 Oct 2016
Four port operators have until Feb. 3, 2017, to submit economic proposals to design, build, and operate a container transshipment terminals near Corozal, at the Pacific entrance to the Panama Canal.
The larger locks of the Panama Canal, pictured, have made it possible to reroute large amounts of cargo destined for the interior United States away from West Coast ports.
19 Sep 2016
Irrational exuberance could result in inflated expectations and overbuilding of transportation infrastructure to the US interior if the cargo volumes don’t materialize.

Commentary

The U.S. Army Corps of Engineers' channel assessment methodology based on national benefit/cost ratio is speculative and, in some areas, flawed, especially on the benefit side.

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