For years to come, “Sunday, June 26, 2016” will be the correct answer to the trivia night question, “When did the Panama Canal open for ships with 14,000 containers?” The original two-lane canal, which opened for business in 1914 and transformed global trade by connecting the Atlantic and Pacific oceans, has until now been limited to ships with a maximum 5,000 containers, according to USA Today.
Work on the third set of locks started in 2007. Approximately 40,000 workers were employed digging the new access lane, which had a total project cost of $5.4 billion. When the original canal was built, 22,000 workers lost their lives to cholera, malaria, and yellow fever across the 44 years it took them to hack through dense jungle in the narrow, 50-mile stretch known as the Isthmus of Panama.
Projects the size of the Panama Canal take years to plan, approve, and complete. During that time world economic factors can shift, but the major trading partners and the ports and infrastructure that support global shipping cannot wait till times look good. Ports around the world also need to fit the larger ships, which can require further investment and upgrading. Miami, which has lost much of its stature as a major port over the years, has committed $1.3 billion to upgrade its port facilities — seeing in the ability to handle the 14,000-container ships a way to regain its stature as a major U.S. hub.
Several factors are at play as the higher capacity section of the canal opens. China’s economy has slowed and worldwide demand has diminished as most countries are still coming back from the Great Recession. Just because larger capacity ships can now go through the canal doesn’t mean that more goods will flow — it just means the capacity is there. Until demand surges again, or at least builds up over time, it will be hard to gauge the ship traffic that will use the new lane. Moreover, container ships aren’t the only type of vessel that needed a larger canal — natural gas is now transported in larger ships that couldn’t previously traverse the original canal.
And it turns out that when it comes to container capacity, 14,000 is not a magic number. The newest large ships can hold up to 20,000 containers. Not many of them ply the ocean trade routes yet, but when they begin doing so in large numbers, they won’t fit the canal. Officials in Panama, however, have already allocated land for a potential fourth set of locks should such a project be deemed necessary in the future.