The expansion of the Panama Canal celebrates seven years

Extension to Panama Canal birthday this monday seven years in service with the challenge of guaranteeing water, which has been scarce in recent months due to a prolonged drought that has forced ships to reduce draft, which will affect revenues from the route.

“This seventh anniversary is accompanied by important challenges regarding water and climate,” he admitted in a press release. Panama Canal Authority (ACP).

The extension of the dry season this year has affected the man-made lakes that feed the highway and supply more than fifty percent population of Panama, so the canal reduced the draft, which is the depth that the submerged part of the vessel reaches in the water.

The maximum draft of the extension is 50 feet (15.24 meters)but now offers 43.5 feet (13.26) and from July 19 it will be 43 feet (13.11 meters)according to the schedule announced to customers on June 14.

This reduction implies that ships have to reduce their cargo volume when they cross Panama Canalthrough which about 3% of world trade passes.

The channel “closely monitors the development of meteorological phenomena that affect the availability of water in the hydrographic basin, which, according to forecasts, could worsen with the appearance of the El Niño phenomenon,” says the ACP press release.

“Current estimates show that the economic impact is imminent,” despite the fact that the Canal implements “water-saving measures during the rainy months to help restore water in the surrounding lakes,” to guarantee “resources for consumption without affecting transit.”

He Panama Canal projected income in 2023 for 4,652.9 million dollars10.3% more than the estimate for 2022, despite the fact that tonnage passing by road was expected to be reduced by 2.8%, according to the budget approved by parliament last September.

EXPANSION BOOSTS BUSINESS

locks neopanamaxbuilt at a cost of at least $5.6 billion and considered a marvel of modern engineering, it represented “more than 50% of the total tonnage” handled by the Canal, “with more than 270 million tons (…) between June 2022 and last May,” the official statement reads.

The widened canal consists of a third lane that allows ships with more than three times the cargo to cross the lane opened in 1914, built and operated by the US until December 31, 1999.

The expansion paved the way for “90% of the world’s fleet of liquefied natural gas vessels (…), which meant significant time savings for producers of” hydrocarbons “in the United States and Latin America when exporting to the west coast of South America and Asia”, he emphasized Panama Canal Authority (ACP).

In addition, it “increased en-route emissions savings for customers by allowing them to transport larger volumes of freight with fewer trips, significantly reducing time, fuel and emissions.”

This has created a “multiplier effect on the local and global economy, affecting maritime transport and trade as ports around the world expand to accommodate larger ships,” ACP added.

Since the expansion began operations, revenues from the Panama Canal have only increased, as have contributions to the national treasury.

In fiscal year 2021, the Canal delivered more than 2,080 million dollars to the country of Panama, which is a new record figure. Between 1914 and 1999in the year in which the US transferred the road to Panama, contributions totaled $1.833 million.