I don’t really talk about my job. Unless you are a supply chain nut, international shipping isn’t all that exciting. I did write up a little article about the Panama Canal recently, so if you want to get your geek on, enjoy!!
One of the Seven Wonders of the Modern World, the Panama Canal is a 48 mile (77 km) shipping canal cutting across the Isthmus of Panama and connecting the Atlantic and Pacific Oceans. The French began the huge engineering project in 1881, and construction of the canal was taken over by the United States in 1904 with the support of President Theodore Roosevelt. When completed in 1914, the canal greatly reduced shipping times and provided a much safer route than transiting the tip of either South America or Africa.Image may be NSFW.
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Construction of the Panama Canal locks, 1913 (Source: Wikipedia)
The narrow locks, only 110 feet wide (33.5 mt), at each end of Gatun Lake raise ships 85 feet (26 mt) above sea level before lowering them down on the other side. It takes 20-30 hours to transit the Panama Canal instead of weeks to take a longer route.
Scheduled for completion in 2016, the US$5.3 billion expansion to the Panama Canal will allow vessels of up to 13,000 teus to transit the waterway, compared with roughly 6,000 teus “Panamax” vessels today. Currently, the third out of four set of lock gates have been delivered. Several work stopages and project delays have plaged the Panamal Port Authority, but Panama’s presidnet Juan Carlos Varela is pushing for completion soon after the canal’s 100th anniversary.
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Pacific entrance to Panama Canal (Source: Wikipedia)
Critics point out that the Panama Canal expansion still will not be able to handle the 18,000 teus “Triple-E” vessels already transiting the Asia-Europe services through the Suez Canal, a much larger waterway that also accommodates oil tankers and aircraft carriers. However, Oscar Bazan, the Panama Canal Authority’s marketing manager remains positive. “The new locks will be a game-changer. Once the new lane is open, we expect to recapture some of the volumes that have shifted to Suez.” He also mentions that US trade to Northeast China will continue to grow even if Southeast Asia cargo continues to ship through the larger canal.
The Panama Canal expansion is triggering further expansion of ports, both within Panama as well as along the US East Coast and the East Coast of South America. A new container terminal planned in Balboa on the Pacific side of the canal expects to handle the 18,000 teu vessels and tranship the cargo there to smaller vessels transiting the canal. Panama’s Free Trade Zone is also expected to grow and enable the region to be come a natural transit point. “Panama is becoming the Singapore of Latin America,” says John Vickerman, maritime port consultant.
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Schematic of the Panama Canal (Source: Wikipedia)
Along with competition from the Suez Canal, the Panama Canal might face competition from a much closer neighbor. Nicaraguan President Daniel Ortega has awarded the Nicaragua Canal project to a Chinese company, who is planning to break ground on the 173 mile-long canal later this year. The controversial plan hopes to accommodate vessels of roughly 23,000 teus, which are forecast to be built by 2030.
Local farmers have been protesting the seizure of their land, but the proposed canal construction would create tens of thousands of jobs for the second-poorest country in the Western Hemisphere. Another concern is the risk of exposing Lake Nicaragua, Central America’s largest source of freshwater, to salinization once connected to the ocean. Environmental impact and potential seismic activity from nearby active volcanoes are also concerns. Masaya caldera is continually erupting near Managua, and Concepcion volcano located in Lake Nicaragua last erupted is 2010.
Sources:
The Economist. A Plan to Unlock Prosperity. http://www.economist.com/node/15014282
Journal of Commerce. Hundreds Protest Against Nicaragua Canal. http://www.joc.com/port-news/international-ports/hundreds-protest-against-nicaragua-canal_20140926.html
Journal of Commerce. Panama Canal Expansion Project Gets Cash Injection. http://www.joc.com/maritime-news/trade-lanes/panama-canal-expansion-project-gets-cash-injection_20140916.html
The New York Times. Panama Canal’s Growth Prompts US Ports to Expand. http://www.nytimes.com/2012/08/21/us/us-ports-seek-to-lure-big-ships-after-panama-canal-expands.html?pagewanted=all&_r=0
US Department of State: Office of the Historian. Building the Panama Canal. https://history.state.gov/milestones/1899-1913/panama-canal
Wikipedia. Panama Canal. http://en.wikipedia.org/wiki/Panama_Canal
Wired. Why the Plan to Dig a Canal across Nicaragua Could Be a Very Bad Idea. http://www.wired.com/2014/02/nicaragua-canal/
Tagged: business, logistics, Panama Canal, technology, work Image may be NSFW.
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Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
Image may be NSFW.Clik here to view.
