When the Cosco Shipping Panama vessel made its way through the Agua Clara locks Sunday morning on the inaugural transit of a Neopanamax vessel through the newly expanded Panama Canal, it could usher in a new era of international maritime trade.
That’s the $5.25 billion bet the Panama Canal Authority (ACP) made in 2007 when construction began. Overcoming highly publicized financial disputes, work stoppages and construction setbacks along the way, it still managed to finish the project just one year after its original target date.
Until now, the lock dimensions haven’t changed since the Panama Canal first opened in 1914. The new locks, Cocoli (Pacific) and Agua Clara (Atlantic), are 180 feet wide and 1,400 feet long, a major increase from the existing lock dimensions of 110 feet wide and 1,000 feet long.
In terms of container ship dimensions, ship size was limited to 965 feet long and 106 feet wide. With the completion of the new locks, the Panama Canal now can accommodate ships as much as 1,200 feet long and 160 feet wide to transit the 102-year-old waterway. That equates to a nearly three-fold increase in volume, from 5,000 to 14,000 twenty-foot equivalent units (TEUs).
According to ACP Deputy Administrator Manuel Benitez, the Panama Canal expansion project is the largest undertaking since the Madden Dam construction project in 1935 that allowed control of the Chagres River’s currents that supply water through the canal.
ACP originally made the decision nearly 20 years ago to expand its canal operations or risk becoming obsolete as its customers began adding larger ships to their operations. But the trend toward even larger ships since the initial expansion plans means that even the new canal system can’t handle today’s largest ocean-going vessels.
“At that time it wasn’t in anyone’s radar that these larger ships would be coming out,” says Benitez. “We looked at several sizes and saw a tradeoff between the size of the locks, project cost and water usage.”
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With the expansion, ACP says it will be able to handle 98 percent of all container ships in operation today. As customers continue to add larger ships that surpass the new locks’ capacities, ACP forecasts it will still be able to handle 95 percent of the global container ship fleet in 2019. “There is a point of diminishing returns on ship size,” says Benitez. “We can accommodate ships that make this project economically feasible and bring the revenues that we expect.”
Benitez says one of the greatest challenges during the expansion project was to add two lock complexes with three steps while maintaining traffic flow through the existing lock systems. “We had more than 14 dredging projects underway at one time in the freshwater navigational channel.”
Once Neopanamax ship traffic normalizes through the Panama Canal, ACP expects the “sweet spot” for container ship size is between 8,500 and 10,000 TEUs. Currently, it has 166 Neopanamax ships with transit reservations, 142 of which are container ships.