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NDTO News Article

Panama Canal Expansion Completed

The Panama Canal Authority completed a $5.4 billion expansion last month, with the first vessels officially sailing through the expanded Panama Canal on June 26. The widening and deepening of the locks began in 2007 and was finally completed after a 2-year delay due to construction complications and labor strikes. The expansion of the Panama Canal is set to attract larger container ships out of Asia on their way to the East Coast.

The largest ships that the original Panama Canal could accommodate were those that carried about 5,000 standard shipping containers, or 5,000 “twenty-foot equivalent units” (TEUs). These ships are known as Panamaxes. The new canal locks are able to accommodate Neo-Panamaxes, which carry roughly 13,000 TEUs. The largest ships in the world, those in Maersk E and Triple E classes, are still too wide for the new lock chambers, and are dubbed as Post Panamax.

The new Panama Canal benefits Neo-Panamaxes with goods destined for East Coast distribution centers, according to Gene Griffin, a consultant with Global Innovative Solutions. Now instead of unloading on the West Coast, and trucking or railing their goods east, they may choose to travel through the canal and dock on the Gulf or East Coast.

“One implication for North Dakota exporters is that the expansion may relieve some congestion for us on the West Coast,” said Griffin.

He notes that North Dakota exports bound for Asia will likely continue to travel west due to the geography and relative ease of getting from Minot or Minneapolis to the Seattle-Tacoma port.

Griffin says that this impact is speculative, as the Suez Canal is certainly going to be competitive.

The Suez Canal completed an expansion of its own last year, adding a second lane for two-way traffic and shorter transit times. The Suez Canal continues to be able to accommodate Post Panamaxes.

Meanwhile the Panama Canal Authority is already talking about their next project – adding a fourth set of locks to accommodate the world’s largest ships carrying 20,000 TEUs. China’s state-owned China Harbour Engineering Company has expressed an interest in building and financing this project.