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.

News & Analysis

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.
18 Dec 2015
Evergreen Group’s Colon Container Terminal in Panama has completed the third phase of an expansion that will allow the terminal to handle the largest ships that will transit the Panama Canal’s soon-to-open larger locks.
02 Dec 2015
The Panama Canal Authority said a contractor has advised it will complete work next month on reinforcement of lock sills that failed tests and raised questions about the planned April opening of the canal’s expansion.
25 Nov 2015
Work on the nearly complete expansion of the Panama Canal was affected this week by a 24-hour national strike by a construction workers’ union protesting alleged court corruption and a possible increase in the nation’s retirement age.
Russell Held at JOC Inland 2015
22 Nov 2015
Port of Virginia's Russell Held on its short-haul inland network, rail connections and the Panama Canal expansion.
18 Nov 2015
The Panama Canal Authority expects to find out next month whether repair and reinforcement of concrete gate sills can be completed in time to avoid delaying the scheduled April opening of the canal’s historic expansion.

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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