The completion of an ambitious $5.4 billion expansion project at the Panama Canal is being hailed by shipping experts and Panamian authorities as a game-changing accomplishment that marks the beginning of a new era in global shipping.
In a ceremony attended by heads of state and shipping executives from around the world, the expanded canal was opened June 26 to so-called neo-panamax ships.
A Chinese container ship, COSCO Shipping Panama, was the first neo-panamax vessel to pass through the canal’s new locks, which are 21 metres wider and nearly six metres deeper than those of the original canal.
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The expansion was the Panama Canal’s first since it was originally opened in 1914.
“More than 100 years ago, the Panama Canal connected two oceans. Today, we connect the present and the future,” said Panama Canal Authority (PCA) administrator and chief executive Jorge Quijano.
The expansion project, which started construction in 2007, includes a new set of locks on the Atlantic and Pacific sides of the waterway and the excavation of more than 150 million cubic metres of material to create a second lane of traffic.
In 2015, the original canal set a tonnage record, transiting 340.8 million Panama Canal units (PC/UMS).
The canal’s original locks will continue to operate, allowing Panamax-sized or smaller vessels to pass.
The new locks will triple the size of ships that can use the canal, allowing the passage of about 98 percent of the vessels currently in use in the world.
Shipping analysts say the expansion will fundamentally alter the economics of global shipping.
So far, the canal has 170 reservations for neopanamax ships, said a news release issued by the canal authority.
The expansion project did not go exactly as planned.
Completion of the project took about two years longer than expected due to labour disruptions and constructions delays.
The canal authority is also involved in a conflict with European companies stemming from cost overruns.
Nonetheless, the authority has plans in place to invest another $17 billion to build yet another set of locks capable of handling even larger ships that can only be handled by one other canal — the Suez.
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