An Expanded Canal Means and Expanded Economy

Just two weeks ago, the world watched as the first commercial vessel, M/V COSCO SHIPPING PANAMA, successfully navigated the Panama Canal’s new expanded locks. The inaugural event was broadcast live to a worldwide audience as the Panamanians in attendance cheered and waved flags in celebration of their country’s newest engineering marvel.

 

Along with numerous heads of state and with representatives from many nations, I had the opportunity to attend the ceremony to congratulate the Panama Canal Authority (ACP) and the citizens of Panama on a successful expansion. Given that two out of every three ships that transit the Panama Canal are headed to or from the United States, our nation is the largest market served by the canal, so we have a strong interest in the canal’s long-term success. The project to build a third set of expanded locks doubled the canal’s capacity and nearly tripled the size of ships that can transit through it. 

 

In this new age of increasingly larger vessels - necessary in the ultra-competitive global shipping market - the opening of the new locks should ensure the canal’s viability for years to come.

 

Likewise, we will potentially see cost savings from this expansion for shippers – primarily for imports reaching our shores on the larger container ships now able to transit through the canal. The expected lower transportation costs could also boost U.S. bulk commodity and energy exports to Asian and Pacific destinations.

 

However, for the U.S. to take full advantage of the enhanced economies of scale promised by the expanded Panama Canal, we have much work of our own to do. We must expand and, in many cases, deepen our own ports and waterways, raise bridges and modernize our aging domestic maritime shore side infrastructure. Many U.S. East and Gulf Coast ports have already completed expansion and deepening projects, invested in larger ship-to-shore cranes in order to accommodate the larger ships expected to utilize the expanded Canal. There are similar upgrades underway at other ports, including channel deepening, berth expansions, crane purchases, truck gate improvements and construction of intermodal facilities to service the ports.

 

The Maritime Administration has been focusing on helping our domestic maritime partners identify areas for improvement while providing expertise and a variety of funding streams, grants and loans, to ensure the industry’s long-term viability. A healthy U.S. Merchant Marine and maritime industry is essential for our national security and economic health. Given the potential effects on U.S. maritime commerce from the Panama Canal expansion through increased international trade and more efficient routing of larger ships servicing the East and Gulf Coast of the United States, we will be closely monitoring the trends that develop as a result of this historic expansion.

 

The expanded canal is a major investment in Panama’s and the region’s future and should yield commercial benefits here at home. Already, more than 200 vessels have booked reservations to transit the new expanded locks. So as the world marvels at the widening of this new waterborne superhighway, we can look to the potential resurgence of our nation’s maritime industry, and the deepening of our 100-year-old partnership and friendship with the Republic of Panama.