gE Blog Series: Global Shipping Industry Part 3 - Expansion of Panama Canal
Since 2007, a construction project has been underway for a third set of locks for the Panama Canal. Undertaken by the GUPC, the completion of locks was delayed for years due to construction problems and contractual issues. However, it looks as though the project is nearing fulfillment. Earlier this month, the consortium behind the expansion announced they were ready to enter the trial phase for the expanded waterway. In a series of over 2,000 investigations, the GUPC plans to test the control systems and electric power that operate the new locks in the Pacific and Caribbean sections of the canal. After this phase, the plan is to run a set of navigation tests during the month of May. If all tests are successful, an expanded Panama Canal could become a reality in the second half of the year.
The Panama Canal is a significant driver of global trade, alone handling about six percent of international commerce. With the new expansion, increased traffic in the canal is anticipated. The new locks are meant to accommodate much larger ships, which may more than double the canal's current cargo capacity. More traffic and commerce will strengthen Central America's hold over global trade, in addition to significantly boosting their countries' economies. Panama, of course, stands to benefit the most, anticipating a 6-7% average increase in economic growth over the next few years. Already earning $1 billion in annual revenue from shipping fees for the canal, it could stand to earn a $3 billion annual rate within the next few years.
The expanded canal will prove a huge benefit to an already-flourishing economy in the Central American region. If tests go successfully, Central America will grow in its status as one of the world's biggest shipping and trading hotspots.