Panama Canal Expansion

So, the other day, I was talking with a buddy of mine. I asked him if had read about the Port of Seattle taking delivery next January of three "long reach" ship-to-shore cranes, for loading and unloading post-Panamax container ships.

His reaction: A blank stare.

My friend was totally unaware of the gargantuan Panama Canal Expansion Program that commenced back on September 3rd, 2007, and its impact on world shipping.



When the Autoridad del Canal de Panamá (ACP) - the Panama Canal Authority took control of the Canal from the United States on December 31st, 1999, there were growing concerns that the existing canal could reach capacity by the second decade of the 21st century.

Indeed, the existing locks prevent passage by vessels measuring more than 106 feet wide (beam.) But the economic reality of international trade have resulted in ships being built much wider.

In order to prevent a total shift to the Suez Canal, it was decided to draw up plans for a major overhaul of the Panama Canal, allowing passage of vessels to be known as "post Panamax" vessels, up to 160 feet wide (beam) drawing up to 50 feet draft (fully loaded depth in water.)

But more pressing is the existing backup of vessels waiting to use the Canal! Two days waiting in the Roads are two days of overhead expenses, amounting to thousands of dollars per day, that shipping companies and customers can ill afford!


Panamanian President Torrijos and his Cabinet approved the expansion project in June 2006. The Legislative Assembly overwhelmingly approved it in July 2006, with 72 out of 78 deputies approving the expansion. The project was submitted to a national referendum, held in October 2006, approved by 78% of voters.

The Panamanian government officially launched the project on September 3, 2007, with a ceremony led by former President Jimmy Carter, whose Administration negotiated the Panama Canal Treaties.

Following an aggressive timeline, the 5.5B (USD) expansion is slated to open in 2014, coinciding with the 100th anniversary of the original canal opening.

The expansion program includes:

• Construction of new locks at the Atlantic and Pacific gateways.
  
• Excavation of new access channels and the widening of the existing channels.
• Deepening of the navigation channels in the Gaillard Cut and Gatún Lake.
• Raising Gatún Lake's maximum operating level.

The new lock system under construction, brings several innovative changes to the Canals operation, that demonstrate the thought that went into the Canal improvements. As you watch this video, you will see three major improvements demonstrated:

• Tugboats to power vessels through locks instead of electric locomotives.
• Horizontal transverse gates instead of Miter Gates.
  
• "Water saver" recycling system will save 7% of Gatún Lake resources.

Each vessel will transit with two tug boats, front for advancement, rear for braking, thus, eliminating the famous electric "mule" locomotives, along with their tracks and line handling personnel.


Horizontal transverse gates, rather than "traditional" Miter Gates. Miter Gates required a massive floating crane to lift and replace worn or damaged gates. Not only is a lane shut down to switch out gates, the process is time consuming and delicate, requiring divers to align the miters.

Here is an example of a recent delay attributed to Miter Gate replacement:

Beginning Wednesday, August 10, 2011 at 2000 hours through Thursday, August 11, 2011 at 2200 hours, and beginning Wednesday, August 17, 2011 at 2000 hours through Thursday, August 18, 2011 at 2200 hours, the East lane at Gatun Locks will be out of service. These two 26-hour outages are necessary for the removal and reinstallation of Miter Gates, and other scheduled maintenance work.

Among the largest floating cranes in the world, "Titan" was one of three massive floating cranes ordered built by Adolph Hitler. One was claimed by the United States as war booty. Named the "Titan," it can lift 350 metric tons and at the time, was one of the strongest cranes in the world.

"Titan" entered service in Panama in 1999, after having served for 50 years in Long Beach, California. The crane can be floated into the locks and is used for the heavy lifting required to maintain the miter gates.

Of the other two floating cranes, the British got one, but lost it in a storm while towing it home across the English Channel. The Russians got the third, but no one seems to know what became of it.

"Water saver" recycling system. Rather than loose precious water on each lock cycle to the open sea, the displaced water is fed into ponds. Notice their action in the video.


While the scope of the Expansion Program is impressive in terms of material that needs to be removed, the most daunting and critical construction feature of the Canal Expansion is the so-called "Borinquen Dam."

The new Pacific Locks incorporate the combined lift now accomplished by the Miraflores Locks, and nearby Pedro Miguel Locks. About a mile separates the current locks, across Miraflores Lake.

Since the new traffic lane is 32 feet above Miraflores Locks and Lake, a series of Borinquen Dams, sheet steel cofferdams, are being constructed along "Borinquen Road." These structures will contain the pressure of water exerted by the third traffic lane, which travels 32 feet above the existing Pedro Miguel Lock and Miraflores Lake, by-passing both the San Miguel and Miraflores Locks!

A massive effort at the Atlantic end of the canal, with dredging and a new set of locks under construction.

The Panama Canal Authority has been kind enough to share some of the construction activity, for us "sidewalk superintendents," via web cam video. My favorites are the two Panorama View cameras, one at the Atlantic, the other at the Pacific, where you can view the new locks as they are being constructed 24/7.

Impact on World Trade

The impact of the Panama Canal Expansion on the shipping world has been compared to the invention of the shipping container. On 26 April 1956, Malcolm McLean’s converted Second World War tanker, Ideal X, made its maiden journey from Port Newark to Houston. It had a reinforced deck carrying 58 38-foot metal container boxes as well as 15,000 tons of bulk petroleum. McLean's enterprise became known as Sea-Land Service, now Maersk-SeaLand.

Container ports compete on a number of levels, not the least of which is "containers per hour per porch." That is, how many containers can be lifted off the vessel and placed on the bomb-cart - skeleton trailer and returned to the vessel. 54 containers per hour is not uncommon!

Shipping container size was finally standardized for intermodal international transportation. Container ships are rated by the number of 20' shipping containers they are capable of carrying.

Virtually every port on the East and West Coasts of the United States and Canada, are scrambling to understand the impact of post Panamax expansion container ships. Some ports are undertaking massive dredging projects, others evaluating ship-to-shore cranes and terminal yards.

Currently, containers using the ship / rail connection to the east coast take approximately 20 days. The new generation of ships will simply transit the canal, taking approximately 25 days.

So as you can imagine, spreadsheet analysis are certainly being conducted. And yet to be determined, the impact of the New Canal on rail traffic. Burlington Northern Santa Fe and Union Pacific in particular will be analyzing the effect of ships by-passing the West Coast all together.
For now, it seems to be a given that time sensitive cargoes will continue to use the sea / rail connection, whilst general cargoes will simply be transshipped through the new Canal. Not so certain is the effect to be felt by the Ports of Seattle/Tacoma, and Vancouver, B.C. And already, the general weakened economy has put the second phase of construction on an indefinite hold in Prince Rupert. On the "plus" side, Prince Rupert did install "long reach" ship-to-shore container cranes.



In July 2011, Mediterranean Shipping Company (MSC) sent her 9,200-TEU container ship "Bruxelles" to five major east coast ports, to get a "feel" for channel depths and determine lane improvements that will be necessary to handle the post Panamax container ships. This ship is drawing 49 feet of water, and is 160' wide (beam) - like a five story building under water - in channels and alongside container piers!

Details of how selected ports are responding to the "Post Panamax Effect" and a primer on current US/Panamanian Relations are found in the Suggested Reading following this article.

Not only are US and Canadian Ports impacted, but also feeder lines to Central and South America. To ignore the possibility of a competitive response recall the fate of the Groupe Eurotunnel SA that went bankrupt as ferry operators improved their service and reduced their costs in response to the competitive threat of the English Channel "Chunnel."


The Canal Expansion has certainly heated up the competition of east coast ports. Here, for example, is how the Canal Expansion could affect the Port of Savannah Georgia.

The stakes are high.


Suggested Reading:
Panama Canal Construction: Update, July 2011
Ports of New York - New Jersey
Port of Savannah
Jasper Ocean Terminal
2011 Florida's Five Year Plan
Panama: Political and Economic Conditions and U.S. Relations
Mitsubishi Air Lubrication System