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Bigger Canal Launches for Bigger Ships

Wednesday, June 29, 2016

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Nearly 10 years after construction began, the expanded Panama Canal officially opened to much fanfare Sunday (June 26).

The $5.25 billion expansion project was undertaken in an effort to boost trade connectivity by making the 102-year-old canal system large enough to accommodate the new larger cargo ships.

As part of the inaugural festivities, a massive New Panamax-style container ship representing the new generation of shipping vessels—measuring 299.98 meters long and 48.25 meters wide and carrying 9,472 containers—was the first to pass through the newly expanded canal on its route to Asia.

"More than 100 years ago, the Panama Canal connected two oceans. Today, we connect the present and the future," Panama Canal Administrator and CEO Jorge L. Quijano said in the opening ceremony. "This is the beginning of a new era."

Biggest Project Since Original

The Expansion Program, which began in 2007, is the Canal's largest enhancement project since the original canal’s launch, according to the Panama Canal Authority.

The project ran about two years past its target deadline, as a result of construction delays, labor issues and cost overruns. Late last year, as the project reached 94 percent completion, progress hit a speed bump when leaks appeared in the new locks.

Video and samples taken from the concrete structure revealed air pockets in the areas where the leakage was evident. Additionally, stresses in an area with insufficient steel reinforcement were determined to have triggered the localized leakage, and the sill in the affected area was reinforced.

However, the completed expansion included a new set of locks on the Atlantic and Pacific sides of the waterway and the excavation of more than 150 million cubic meters of material, creating a second lane of traffic and doubling the cargo capacity of the waterway.

A time-lapse video shares five years of construction for the Panama Canal Expansion, featuring progress made between March 2011 and June 2016.

“The amount of steel used could have erected 29 new Eiffel Towers,” The Washington Post reported. “The Empire State Building could lie down and fit into just one of the three chambers in each of the new channel’s locks.”

And although the expanded locks are 70 feet wider and 18 feet deeper than those in the original canal, they use less water due to water-savings basins that recycle 60 percent of the water used per transit, the Authority explained.

Larger Vessels, More Capacity

Intended to provide greater economies of scale to global commerce, the expansion will enable passage of ships more than two and half times the previous size limit, maritime news site gCaptain reported.

Vessels carrying up to 14,000 TEUs (twenty-foot equivalent units, a measurement of ship cargo capacity) will now be able to pass through the waterway.

Prior to the canal’s expansion, it could only accommodate only ships with cargo no greater than 5,000 TEUs.

The expansion not only doubles the canal’s capacity but also opens it up to new markets for shipping lines and producers of liquefied natural gas (LNG)—a new segment altogether for the Canal, gCaptain added.

Lock size comparison
Panama Canal Authority

The new locks are wider and deeper thant he original, enabling passage of ships more than two and half times larger than before.

Of the 166 reservations in line for the expanded canal, about 17 are for LNG carriers, according to The Guardian. “In the coming years, Panama hopes to capitalize on the fact that the U.S. has recently become an exporter of oil,” the paper added.

“We knew that if we did not embark on this project, the quality and span of our services ran the risk of deteriorating, impacting shippers, customers and our country alike,” Quijano said in a speech to customers. “The expansion will open new trade routes.”

Longevity and Impact

According to The Guardian, the new locks can handle 98 percent the ships currently on the market. However, by 2019 that could drop to 95 percent as even larger vessels are introduced, said Manuel Benítez, deputy administrator at the Panama Canal Authority.

“Will the ships keep growing forever? I think there is a point of diminishing returns,” he said.

“The Panama Canal Authority is already looking into another expansion,” said Ivan Zarak, Panama’s vice-minister of economy. Those new expansion plans will have to be economically viable, however, he added.

Meanwhile, the expansion has prompted other port authorities to take actions to bring structures up to date.

“The old Panama Canal was an impediment to deploying ships to the East Coast of the United States from Asia,” South Carolina Ports Authority (SCPA) chief executive James I. Newsome III told the Post.

In its “2016-2020 Port Planned Infrastructure and Investment Survey,” the American Association of Port Authorities, found that its members and their private-sector partners planned to spend approximately $155 billion on port-related freight and passenger infrastructure improvements over the next five years, Building Design + Construction indicated.

This compared to their planned $46 billion in spending reported five years earlier.

Panama Canal inauguration 2016
Panama Canal Authority

As part of the inaugural festivities, a massive New Panamax-style container ship representing the new generation of shipping vessels was the first to pass through the newly expanded canal on its route to Asia.

Several U.S. port projects have been highlighted by the media.

The SCPA has undertaken a $1.6 billion program that includes construction of a $750 million terminal and $350 rail line at the old North Charleston Naval Base, sources said.

It is also investigating plans to dredge Charleston’s 45-foot-deep harbor to a depth of 52 feet by the end of the decade. With a $509 million price tag, this project reportedly would make Charleston the deepest harbor on the East Coast.

The Port Authority of New York and New Jersey is embarking on a $1.3 billion project to raise the 85-year-old Bayonne Bridge by 2017 so that larger ships can pass beneath it, the Post reported.

The Port of Seattle, reacting to fears that the Canal expansion could cause container ships to bypass Pacific Northwest ports altogether, is seeking approval for a $200 million dollar expansion that would double the number of such ships the port could accommodate, an area news station noted.

“Whether the canal expansion will shift cargo traffic to East Coast and Gulf Coast ports is an open question,” the construction news magazine wrote.

However, citing a report from Boston Consulting Group and the supply-chain provider C.H. Robinson, data suggests at 10 percent of container ship traffic from East Asia could shift from western to eastern ports.

   

Tagged categories: Asia Pacific; EMEA (Europe, Middle East and Africa); Infrastructure; Latin America; Locks and dams; Marine; North America; Port Authority of New York; Program/Project Management; Shipyards; Transportation

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