Typically, a centennial celebration is a time to step back and celebrate the past. But that’s not the case at the Panama Canal, which turns 100 this year. While the world is taking a little time to celebrate this marvel of 20th century engineering, all eyes are on a soon-to-be-completed expansion that is expected to usher in a new era of waterborne commerce, with huge implications for U.S. ports and cities.

Panama is investing about $5 billion to construct larger locks and deepen the canal to accommodate a new era of large ships already at sea, said Jeffrey McKee, chief of the navigation and operations branch at the U.S. Army Corps of Engineers (USACE). For USACE and coastal ports, the prospect of a wider and deeper canal between the Atlantic and Pacific oceans is driving rapid growth as U.S. ports try to capitalize on an expansion that may be a game-changer in navigation.

Experts long have used the term “Panamax” to describe ships with a size capable of passing through the canal as currently built. But the focus is turning to “post-Panamax” ships that greatly reduce ocean transportation costs.

“Ship sizes are forecast to increase in the near future, and we’ll see larger vessels calling on U.S. ports,” McKee noted. USACE is not directly involved in new construction at the Panama Canal, though some of its experts were involved in concept-design engineering for the expansion effort. But USACE is front and center as coastal ports – particularly in the east and southeast United States – seek their own expansions to accommodate the larger ships likely to start passing soon through the Panama Canal.

Experts long have used the term “Panamax” to describe ships with a size capable of passing through the canal as currently built. But the focus is turning to “post-Panamax” ships that greatly reduce ocean transportation costs. While these ships have not yet been able to pass through Panama, demand is up around the world as evidenced at the Suez Canal in the Middle East, which has the capacity to accommodate these ships, and post-Panamax vessels are already calling on U.S. east, west, and Gulf coast ports.

Though it is uncertain how much the canal’s expansion will drive increases in U.S. port traffic, some data show that the changes may be dramatic. New construction is expected to double the canal’s current capacity of 300 million tons per year. As recently as 2008, according to USACE, about 70 percent of all cargo traveling through the canal was headed to or coming from the United States.

 

 Expanding the Canal

The Panama Canal currently links the Atlantic and Pacific through a 48-mile-long channel with a depth of nearly 40 feet. Back in the 1930s, two decades after its completion, experts projected that it would accommodate 80 million tons of cargo per year. By the 21st century, that standard had increased nearly fourfold, with ships waiting up to 10 days to pass through the structure. Panamanians in a public vote approved an expansion in 2006 to double capacity by essentially building another lane with new locks to allow the passage of more ships.

The expansion also will increase the canal’s depth to 50 feet, widen and deepen existing navigation channels, and add new locks on both the Atlantic and Pacific sides. As a result, McKee said, the expansion will accommodate larger tankers, bulk carriers, and container ships in the post-Panamax era.

The construction may alter the thinking of traders worldwide and in the Western Hemisphere, who may find the expanded canal more cost effective than sending goods via multiple trucks and trains from one U.S. coast to another.

For many U.S. cities, the expansion is likely to mean larger ships in port – provided those ports have expanded their own capacity to welcome the new, larger ships. “Some ports certainly will be prepared for post-Panamax vessels. For others, it may depend on what ships take advantage of the new canal and specific cargo routes,” McKee said.