Status update in Panama
Panama Canal update As of April 2013, the retrofit of the new locks at the Panama Canal was nearly halfway complete, at 42 percent. The construction of the upgraded lock system is the most important component of the $5.25 billion project, as it will accommodate post-Panamax ships with a 12,600-TEU capacity. Additionally, the remaining portion of the canal renovation is wrapping up – this includes deepening and widening of the channels along the original route of the canal and construction of new access channels. Most notably, however, was the completion of the Culebra Cut dredging in early March.
With all of the progress on the expansion project there have also been some setbacks. Work on the expansion is about eight months behind schedule, which has impacted current shipping lines. Maersk, the world’s largest container-shipping line, has stopped using the Panama Canal for its Asia service to the United States’ East Coast ports, and is instead utilizing the Suez Canal. The hope is a post-Panamax-ready canal will return traffic presently being diverted through Suez. Over the next 18 months, the Autoridad del Canal de Panamá will need to define a creative pricing structure to give the Panama-option real value as the new locks come online. This is imperative since the fees will ultimately influence potential trade flows.
As the expansion project aims for completion in early-mid 2015, many U.S. ports on the eastern seaboard are racing to complete their own dredging and infrastructure projects. Also, South American countries such as Brazil and Argentina are feeling the pressure to invest in their port infrastructure in order to keep up with China and the U.S. and reach their full potential in global trade in a new era of increased shipping capacity.
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