PANAMA CITY — More than 100 years ago when the SS Ancon sailed into the history books as the first ship to transit the Panama Canal, the waterway was a display of American ingenuity and the Panama Canal Zone was
PANAMA CITY — More than 100 years ago when the SS Ancon sailed into the history books as the first ship to transit the Panama Canal, the waterway was a display of American ingenuity and the Panama Canal Zone was firmly in U.S. hands.
But the ship making the first official trip through the newly expanded canal Sunday will be a Chinese megaship. The United States completely withdrew from the canal on Dec. 31, 1999, and there was barely any U.S. participation in the $5.5 billion canal project, which will allow the world’s bigger ships to transit Panama’s “highway of the sea.”
The United States remains the most important user of the canal and canal officials say it will be for the foreseeable future, but world trade patterns have shifted in the past century and China has become the world’s largest trading nation.
Between 6 a.m. and 7 a.m. on Sunday, China COSCO Shipping’s recently renamed 984-foot-long Panama will approach the new Agua Clara locks on the Atlantic side of the 50-mile-long canal to begin the first official voyage through the expanded canal. It won the honor in a drawing among the canal’s top customers.
Although the new locks — tall as an 11-story building — are an engineering marvel and the expansion is expected to double the canal’s capacity, it’s been a long slog. The project is being delivered nearly two years behind schedule and various claims by the Grupo Unidos por El Canal (Group United for the Canal), the international consortium that built the expansion, could push the price for the project even higher. The Panama Canal Authority also has its own counter-claims. Arbitration on the first unresolved claim gets underway in Miami in July.
But now — 110 million man hours, 292,000 tons of structural steel, 1.6 million tons of cement and 5 million cubic meters of concrete later — the project is finished. Panamanian voters approved it in a 2006 referendum.
“This is a great project from an engineering and logistical point of view,” said Giuseppe Quarta, chief executive of the consortium.
The project, which got underway in 2007, included deepening and widening the entrances to the canal, widening and deepening the navigational channel through Gatun Lake, deepening the channel at Culebra Cut, raising the level of the lake, building a new 3.8-mile Pacific access channel, and construction of larger Atlantic and Pacific locks that are as long as three Empire State Buildings laid end to end.
The original canal, built at great human and financial cost, is simply too small to handle the bigger ships now plying the world’s trade routes. Smaller ships, however, will continue to use the original locks, and the old and new locks share much of the original canal route.
With the expansion able to handle longer, wider and heavier post-Panamax ships, the canal authority hopes to win back shipping lines that switched to the Suez Canal or used U.S. West Coast ports because their ships couldn’t fit through the original locks inaugurated on Aug. 15, 1914.
As the COSCO Shipping Panama set sail from Greece en route to its date with history, Panama Canal Administrator Jorge Quijano noted that “over a hundred years ago, the SS Ancon made history as the first vessel to transit the Panama Canal” and now Panama is on the verge of a new era “that will change the face of global shipping and international commerce.”
Panama’s President Juan Carlos Varela will preside over a ceremony at the Agua Clara locks celebrating those who worked on the project. Then the Chinese ship will proceed to the 3 p.m. main event on the Pacific side of the canal.
At least 10 heads of state as well as port directors and shipping executives from around the world are expected at the Cocoli locks to mark the inaugural passage. The next day, the new locks will open for regular commercial traffic. Already, shipping lines have made more than 120 reservations for the new locks.
As he watches the Chinese ship finally enter the locks, Manuel E. Benitez, deputy administrator of the canal authority, said, “I’ll be a happy man.”
The timing for delivery of the project hasn’t been great. Not only have low water levels brought on by an El Nino-induced drought in the Panama Canal Watershed hampered shipping operations through the canal this year, but the economic slowdown in China and too many ships chasing too little cargo on many shipping routes worldwide also have taken a toll.
“This has probably been one of the worst years for the container industry,” said Benitez. “Eventually we see the shipping industry coming out of this.”
But Benitez said the hope is that the canal will not only be able to capture traffic that shifted to the Suez Canal but also pick up about 10 percent of the cargo that now goes directly from Asia to U.S. West Coast ports.
Cargo arriving at Long Beach and Los Angeles — the two busiest ports in the United States — is shipped by rail or trucked to the Midwest and East Coast. The West Coast route is faster, but it’s cheaper to ship cargo through the canal to East Coast ports.
Meanwhile, the delays in completion of the expansion have given U.S. East Coast ports and other ports around the Americas more time to complete dredging and other improvements so that the big ships transiting the canal can enter their shipping channels fully laden.
In Panama, the canal is not only the economic lifeblood of the country that sits between two oceans, but the expansion project has become a huge source of pride for Panamanians.
“The canal is the advantage that Panama has over everyone — and it always will,” said Philip Nichols, professor of legal studies and business ethics at the University of Pennsylvania’s Wharton School. “They know they have an income, no matter what. It’s like having a good, solid lead tenant when you’re building a development.”
But fees from ships transiting through the canal aren’t Panama’s only source of canal-derived income. Panama has become a thriving trans-shipment point for Latin America-bound cargoes, it is developing a new port on the Atlantic side of the canal and it is in the process of bidding out construction for a new port at Corozal on the Pacific side.
“Panama is a natural trans-shipment hub,” said Benitez. In recent years, cargo handled by the Port of Balboa on the Pacific has grown from about 250,000 containers a year to 3.5 million, he said.
Although the paint is barely dry on the new locks, the Panama Canal Authority is already studying the possibility of another larger set of locks because ships too big to fit through the new locks are already being built.
