Panama Changes World Shipping

Ports are expanding worldwide in anticipation of the Panama Canal's new locks, expected to open in 2014. Presently, ships and ports sizes are limited to the maximum dimensions that the Panama Canal allows. So called Panamax vessels can have a maximum length of only 294 meters, making larger post-panamax vessels less economic to run on shipping routes between the Atlantic and the Pacific. The new locks allow for much larger ships of over 400 meters, which increases the capacity of a typical container ship from 5000 to 13000 units. This has prompted the ports of Miami, New York, Baltimore and many others to increase depth and port facilities.

But those are only immediate effects. Panamax ships have a relatively small beam in comparison to their length and therefore run less efficient than what is hydro-dynamically possible. Shipbuilders around the world are well aware of these new possibilities of the canal's expansion.

Trade routes could drastically change when post-panamax vessels can traverse the pacific from East-Asia, pass the canal, dock in the US east coast and continue to Europe and vice versa. Bulk carriers from North and South America no longer have to circumnavigate the stormy Drake passage to ship goods to Asia at more competitive rates, though draft will still limit the largest bulk carriers. US agriculture will benefit greatly from better access to the lucrative Chinese market, whereas domestic rail freighters will suffer from increased shipping competition.

With so much focus on Panama, multinational businesses are establishing themselves in Panama in large...

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