Coverage: New Panama Canal open to more global trade

A $5.4 billion expansion of the Panama Canal opened Sunday, allowing bigger ships to cross from the Atlantic Ocean to the Pacific Ocean amid hopes that global trade will expand as a result.

Chris Kraul of the Los Angeles Times had the news:

Whereas the original canal opened in 1914 to accommodate ships carrying as many as 5,500 cargo containers, the new locks can handle ships ferrying 13,000 such containers. Operators say the expansion was necessary to keep the historic canal competitive in a global freight market.

The expansion ostensibly makes the canal a more efficient option for freight companies shipping goods from China to the Eastern Seaboard, which is the canal’s most important and lucrative commercial route.

But trade experts warn that many U.S. ports are still unprepared to handle the larger ships. That fact, combined with the current softness in global freight traffic, means it may take some time before the traffic justifies the investment.

Before the first ship was lifted from sea level up to Panama’s Gatun Lake, a man-made reservoir that collects water to fill the locks, President Juan Carlos Varela and canal administrator Jorge Luis Quijano welcomed the ship in the Caribbean port city of Colon. Both touted the project’s economic effect and paid tribute to the 40,000 workers who built it.

Rick Jervis of USA Today noted that the wider canal means more chances for drug smugglers:

Amid the celebration, some U.S. officials cautioned that a bigger canal and larger ships also mean increased chances for drug cartels to sneak more drugs and contraband through the Panama isthmus.

“Let us not forget that with the positive elements that come from this expansion of the canal, there are also some dangers as well,” said William Brownfield, assistant secretary of State for international narcotics and law enforcement affairs.

“The fact that a ship can now carry up to three times as much cargo as it transits the canal means that the professional trafficking organizations — trans-national criminal organizations — have that much more space, that much more possibility, to move product through the canal,” he said.

“We’ve got to make sure as we celebrate … that we remember we still have a challenge in terms of law enforcement and security,” he added.

Adm. Kurt Tidd, commander of the U.S. Southern Command, congratulated Panamanian leaders on the project’s completion but echoed Brownfield’s call for maintaining scrutiny on the waterway.

Steve Mufson of The Washington Post noted the larger ships that necessitated the expansion:

Although cargo tonnage through the canal has risen 60 percent since 2009, Panama needed to expand the canal to accommodate a new generation of container ships, known as neo-
Panamax, which are too big for the old canal locks. The new locks are wider than the old ones, 180 feet vs. 110 feet, and are deeper, too, at 60 feet vs. 42 feet. Officials say the larger locks and new lane will double the waterway’s cargo capacity. More than 170 neo-Panamax ships have already booked reservations in the expanded locks.

“We knew that if we did not embark on this project, the quality and span of our services ran the risk of deteriorating, impacting shippers, customers and our country alike,” the Panama Canal Authority’s chief executive, Jorge Quijano, said in a speech to customers Saturday night. “The expansion will open new trade routes.”

Export facilities are being built to send abundant U.S. shale gas to foreign markets, many of them in Asia, where China’s fast growth and Japan’s idle nuclear plants have created demand.