Hats Off to the Panama Canal

The Panama Canal has been winning back its market share of round the world trips since its major upgrade two years ago.

The strategic canal opened enlarged locks in 2016 to increase the capacity size of ships that could navigate the waterway. The lock upgrade enabled container vessels of up to 13,000 TEU in size to pass, which had previously been limited to around 5000 TEU.

Panama had been losing business to the Suez Canal over the five years prior to its upgrade, but now with return incentives being offered to shipping lines and with its larger capacity capabilities, business has been returning to the canal.

The canal remains the only point, in North or South America, that vessels can pass en-route from Asia to the US East Coast and vice versa. Prior to the lock widening 86% of cargo between Asia and the Eastern US was moved via ocean and rail through the West Coast.

The revitalised canal has reduced the need for the West Coast landbridge services down to 31% currently, which is another clear indication that the project completed in 2016 is proving to be a success.