Panama Canal expansion is boosting growth in Panama
and other countries and changing global trade routes
By Jorge L. Quijano
Panama Canal Authority Administrator and CEO
After 102 years of providing reliable service to the global maritime industry, the Panama Canal celebrated the successful Inauguration of its Expansion Program this year — one of the most significant milestones in our waterway’s storied history. Thanks to the more than 40,000 talented workers who dedicated nearly nine years of their lives to the Expansion’s completion, the Canal can continue connecting and improving global commerce for years to come as one of the world’s main trade arteries, while, at the same time, driving economic opportunity here at home.
While the original Canal opened more than a century ago, the story of the Expansion Program began more recently. In a national referendum in 2006, more than 76 percent of Panamanians approved the proposal to create a third lane of traffic. A year later, construction began on the $5.25 billion project.
To be clear, this feat of engineering — which included the creation of a new set of locks on the Atlantic and Pacific sides of the waterway and the excavation and dredging of more than 150 million cubic meters of material — was no easy task. But we stood confident in our abilities. And for a project conceived by Panamanians, approved by Panamanians, and ultimately brought to fruition by a workforce vastly made up of Panamanians, its inauguration was a truly proud moment for our nation.
Today, the effects of the Expanded Canal can be felt around the world. The Expansion effectively doubles the cargo tonnage capacity of the existing waterway, and allows Neopanamax vessels —which transit 45 percent of the world’s cargo — to use the Canal. In turn, global trade routes have been redrawn as major liners such as the CKYHE Alliance, the G6 Alliance, and the 2M Alliance reroute services to the Canal to capitalize on the time and cost savings it provides. Furthermore, we’ve opened up new trade flows of commodities, such as Liquefied Natural Gas (LNG) that has transited the Canal for the first time, boosting American exports and providing additional clean energy resources to communities throughout Asia and the Americas.
The Expansion has also provided opportunity for countries to activate their own economic growth projects alongside the Canal’s. Ports throughout Latin America and the U.S. East and Gulf coasts have invested billions of dollars and created thousands of jobs to improve their logistics infrastructure by deepening channels, raising bridges, and improving ports’ logistics capabilities. This way, they can receive these larger Neopanamax ships and enjoy the benefits that increased shipments and cargo will provide.
In the two months since its inauguration, the Expanded Canal has received more than 300 reservations and transited more than 125 Neopanamax vessels. These figures are increasing steadily each day. In FY 2017, we expect to welcome upwards of 399 million PC/UMS (Panama Canal tons), and possibly reach approximately 500 million PC/UMS in the next five years.
The Expanded Canal has already begun to deliver. But the new route is just the beginning of an ambitious plan to strengthen Panama’s position as the logistics and shipping hub of the Americas. We plan to continue making investments in the Canal and are looking into future projects on the mid-term horizon. These projects include a new container terminal on the Pacific side, logistics parks and a Roll On-Roll Off cargo terminal, all of which will enhance Panama’s logistics capacity and take full advantage of the connectivity the Expansion offers the country.
As I reflect on where we are today, I see the positive impact the expanded Canal is having on global trade, and as the Canal continues to grow, so too will Panama — this is something I’m most excited for.
102 years ago, the Panama Canal connected two oceans. Today, we connect the present and the future.
Jorge L. Quijano is the administrator and CEO of the Panama Canal Authority, the autonomous agency that manages the Panama Canal.
About the photo on the home page: The photo on the home page shows the first Suezmax crude vessel to transit the new waterway. The photo is provided courtesy of the Panama Canal Authority.
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