June 27, 2016 - Federal Maritime Commission Chairman Mario Cordero yesterday witnessed the historic opening of the newly expanded Panama Canal as a member of the official United States Delegation.
"It was an honor to have been able to be able to attend this truly momentous event and I was privileged to be among those who comprised the delegation representing the United States at the ceremonies," said Cordero. "This was not only an opportunity to celebrate an expanded Canal that will better serve ocean trade, but to also pay tribute to those who originally built the Canal and achieved an engineering and construction milestone that was nothing short of monumental."
French concerns first began construction on the Panama Canal in 1881, but initial efforts were quickly stymied by a variety of factors including disease and natural elements. By the dawn of the 20th Century, progress on the Canal had been largely arrested until the vision and leadership of President Teddy Roosevelt resulted in the United States assuming control of the development project in 1904.
"Teddy Roosevelt was a President who understood the importance of the United States being a globally relevant power and the necessity of control of the maritime commons for the benefit of economic and military interests," noted Cordero. "The Panama Canal represented a vital asset to achieving America’s global maritime reach in commercial and naval matters and it is a testament to the vision of President Roosevelt that the waterway not only achieved his immediate goals, but continues to play a vital role in promoting American trade."
The Panama Canal opened in 1914 and has provided an invaluable transportation path that speeds ocean transportation and contributes to the efficient flow of international trade. The $5.2 billion expansion of the Panama Canal began in 2007 and significantly increases the maximum size of vessels ("Panamax") that can transit the waterway to those capable of carrying 14,000 Twenty Foot Equivalent Units (TEUs). By way of comparison, legacy Panamax vessels carry approximately 5,000 TEUs and the largest container ships in operation today have capacities in excess of 18,000 TEUs.
"The Canal expansion was an ambitious undertaking that demonstrates a commitment by the Panamanian government to keeping it relevant to international trade in the 21st Century," commented Cordero. "The new dimensions of the Canal’s locks can serve all but the largest ships in the world’s container fleet. This will provide ocean carriers with more routing choices which should yield options that will help shipping companies to offer service choices that guarantee reliability and will ultimately benefit the American consumer."
Cordero said he, and the Federal Maritime Commission, will monitor the impact of the Canal’s expansion on ocean cargo service options to the United States.
"There is much speculation about what commercial changes, if any, will occur in ocean shipping once the newly expanded Canal becomes operational," said Cordero. "The Commission will certainly watch to see if service options change across the international intermodal supply chain, and we will work to make certain that the American shipper and consumer is not adversely affected."
The Canal expansion project incorporates a number of different individual improvements, each in itself significant. The construction of new and larger locks, however, is the undertaking that provides the infrastructure necessary to allow larger vessels to move through the Canal. One of the key achievements of the expansion project was incorporating measures to recycle 60 percent of the fresh water that is used in each vessel transit through the locks.
"Freshwater is not a commodity, but rather a precious resource. The priority Canal management made to finding ways to incorporate design features that achieve environmental benefits, especially in terms of freshwater management, is impressive and commendable," said Cordero. "The Panama Canal Administration and the Government of Panama are to be commended for their stewardship of this facility and their commitment to keeping the waterway as a relevant and vital path over which international trade flows. The expansion process was an ambitious and complex project that has been completed successfully. The international trade community owes a debt of gratitude to the men and women at the PCA and the Panamanian government who worked so hard to make today possible."
While the expanded Panama Canal will aid in providing more transportation options for supply chain managers, Cordero was equally optimistic about the benefits the larger waterway will have for promoting the shipment of American energy products to overseas markets.
"The United States is fortunate to have substantial energy resources which are not only beneficial for domestic use, but represent a valuable export commodity that is in demand in other parts of the world," observed Cordero. "The expanded Canal will in particular enable LNG exports a more direct and economical route to foreign consumers, representing yet another way for the President’s Export Initiative to be realized."The MV Panama, a 9,400 TEU capacity container ship operated by China COSCO, was the first vessel to make the transit through the expanded Panama Canal. The Panama Canal Authority held a lottery of its top 15 customers to determine who would have the honor of the ceremonial inaugural voyage through the facility.