San Francisco: Even when the revamped and enlarged Panama Canal is fully functioning and handling the new breed of supersized container ships, it is unlikely to recapture its glorious boom years, its chief admitted in an interview published on Monday.
Jorge Quijano, chief of the Panama Canal Authority, told the UK’s Financial Times newspaper that changing patterns in global trade and manufacturing and more restrained spending habits by US consumers meant the Canal’s business was unlikely to revisit the heights of the 1990s and 2000s. The US economy is responsible for more than two-thirds of the canal’s business.
The Canal has been undergoing a $5.3 bn expansion for the past eight years, a huge and prodigious engineering project that includes an additional third shipping lane, new locks and new access channels.
The century-old Canal recorded its best year for container traffic in the year to September 2007 with 3,600 ships carrying the equivalent of 12.6m teu. In the 2014 financial year, 2,891 container ships passed through the canal carrying 11.6m teu.
In theory the expanded Canal, expected to be ready by early 2016, would be able to handle ships one-and-a-half times wider and longer than its current maximum, meaning double the amount of cargo.
The trend for ever-bigger container vessels led to some of the largest ones being too big for the Canal. But once the expansion is completed, the Canal would be able to accommodate ships carrying up to 14,000 teu and 97 per cent of the global merchant fleet.
One of Panama’s northern neighbours, Nicaragua, is even building its own rival canal with an expected completion year of 2020.