Expanding the Panama Canal

On August 15th, 2014 the Panama Canal turned 100 years old. The celebration took place at its Miraflores lock and incorporated a Centennial Gala with over 2,000 attendees. This remarkable event celebrates one of the “seven modern wonders of the world,” an engineering feat that took over 35 years to complete. This milestone brings celebration, while marking a new era for the Panama Canal which is in its final stages of expansion.

The Panama Canal expansion was initially proposed in 2006 and restructuring began in September of 2007. The expansion was due to be done in time for the canal’s 100th year anniversary, however its completion date is now projected for June of 2015. Currently the largest ship that the Panama Canal can accommodate for is 106 feet wide and 950 feet long. By the time the expansion is completed, it will be able to hold ships up to 160 feet wide and 1,200 feet long. This expansion means an increased volume of cargo – up to three times more than the crago that was previously being carried through.

Panama CanalSource: Wikipedia

U.S. Ports Prepare for the Panama Canal Expansion

In anticipation of the Panama Canal expansion, ports around the United States are investing large sums of money into new infrastructure projects in order to handle the surge of shipments coming their way. The increased cargo loads bring good news to port cities and surrounding regions that will benefit economically. These new infrastructure projects are popping up across the United States from Houston, Texas to Newark, New Jersey. The upgrades to their ports will allow larger vessels with expanded TEU capacities access to their ports so they can offload there and become a significant piece of the puzzle for major importers and exporters.

These large investments hold significant changes for some cities. The Port of New York & New Jersey plans to raise the height of the Bayonne Bridge in order to allow larger capacity vessels to pass underneath and dock at their port. In Maryland the Port of Baltimore is investing over $100 million in new cranes. The State of Florida is spending over $700 million on new improvements to ports in Miami, Port Everglades and Jacksonville. Even ports in Jamaica and Australia are gearing up for this new expansion.

port_authoritySource: npr.org

Ports Must Expand to Remain Competitive

The sum of money being spent on infrastructure enhancement may seem hefty but it is crucial for a port’s economic vitality and remains essential in order for them to compete internationally. As larger ships begin to enter ports, they will increase their activity and congestion while still requiring a swift turnaround rate to continue their journey to other ports. Along with port expansion and reconstruction, inland connectivity must not be overlooked. Rail connections and continued development of distribution centers are just as vital as they are also driving forces in trade patterns.

Companies who rely on a rapid supply chain will now need to change their port preferences depending on the most convenient and efficient port after the expansion. The speed and ease with which cargo can exit the ship to get to railroads or onto trucks is the key factor for these ports and their infrastructures. The ports that can get this process right and do it most cost-effectively will certainly succeed. Those who do not will most likely see a decrease in their business.

unloading panama canalSource: Business Climate

Expansion Affects Us All

The United States will not be the only country to benefit from this expansion. Emerging markets with competitive production rates such as Mexico and South America have the opportunity to gain market share as well. In Columbia, the Port of Cartagena will invest $400 million to help double their container capacity. Similarly, the port Authority of Jamaica is expecting the expansion to boost their port volumes. They are upgrading both their organizations and equipment in order to take advantage of their prime location in the Central Caribbean.

Although a hefty investment in new port infrastructures could be a gamble for some, the projected payoff will likely benefit them in the end especially in terms of competing with other ports around the globe. Without these changes and investments, these ports will put their region’s economies at serious risk.



1. Romeo, Jim. “Game Changer” The Maritime Executive. July/August 2013: 50-55. Print.

2. http://www.newsweek.com/2014/07/25/bigger-ships-bigger-risks-expansion-panama-canal-brings-opportunities-and-dangers-259600.html


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