Panama Canal Expansion

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

15 Oct 2019
The first step in dredging the harbor in Norfolk will begin in January 2020, kickstarting a project that will make the Port of Virginia the deepest harbor on the East Coast.
30 Sep 2019
Falling behind on connectivity for import/export cargo can easily trigger the negative feedback loop, eventually leading to elimination of the regular liner services.
20 Jun 2019
Asian manufacturing shifts and the rising cost of fuel are influencing all-water US East Coast services.
20 May 2019
Shallow Panama Canal draft limits have already pushed up spot rates from Asia to the East Coast, with the cost of moving an FEU up 14 percent year over year.
10 May 2019
Draft restrictions resulting from low water levels in the Panama Canal are driving up spot ocean freight rates between Asia and the US East Coast in the short term, but the long-term outlook is unclear due to further threatened tariffs on US imports from China.
07 May 2019
The Panama Canal Authority (ACP) announced the sixth reduction in its maximum draft this year for the Neopanamax locks on Gatun Lake as water levels continue to fall.

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.

More Commentary