The prospect of giant ‘Super Post Panamax’ size container ships, bulk carriers and tankers sailing across the warm waters of Lake Gatun in the middle section of the Panama Canal will become a reality in 2015, just over one hundred years after the Canal was first opened. The current two lanes for ships up to Panamax size will be joined by a new lane, equipped with two new lock complexes, for these huge vessels at the Atlantic and Pacific ends of the canal. This canal is one of the greatest wonders of engineering of the world, and is just over 50 miles in length, with ships raised a height of 85 feet by locks at both the Atlantic and Pacific ends to cross from one ocean to another. The current transit time of eight to ten hours will remain the same for the new Post Panamax lane. The great Canal shortens the voyage between U.S. East coast and West coast ports by over 8,000 miles over the route via Cape Horn. The current operation of the Canal is very efficient, in spite of being a century old, and it is worth looking first at the extraordinary history of it’s construction.

The Existing Canal

In 1803, the Spanish occupiers of the isthmus of Panama, lying only nine degrees above the Equator, were driven out of their coastal bases, and nine years later Panama became independent of Spain and voluntarily united with neighbouring Colombia. The Spanish had known for centuries that a canal cut through the impenetrable jungle was probably practicable, and also Humboldt (1769-1859), the famous German naturalist and traveller, suggested this at this time. A report was submitted to the U.S. Government in 1859 by Manx born William Kennish for a proposed Panama Canal, but it was left to the French in 1880 under Ferdinand de Lesseps, constructor and conqueror of the Suez Canal in 1859, to begin a sea level route without locks.

Unfortunately, Ferdinand did not commission a prior study of the geography and hydrology of the isthmus, and he was also unaware that mosquitoes caused malaria and yellow fever, known as the dreadful ‘Panama Fever’. During nine years of French construction, a staggering total of over 22,000 workers died in horrible temporary hospitals, which contributed breeding places for the mosquitoes in unscreened wards. Eventually, all of the French digging equipment became mostly unworkable due to heavy rust from the constant downpours during the extremely hot afternoons, and work was abandoned in 1893.

The challenge of constructing this modern wonder of the world was taken up by the U.S. Senate in June 1902, when they voted in favour of pursuing a Panama Canal, and a Treaty was signed with Dr. Thomas Herran of the Colombian Government. This was not ratified by Colombia in 1903 and American President Theodore Roosevelt then promised support for the separatist movement of Panama. At the end of 1903, Panama achieved independence from Colombia after U.S. warships had blocked sealanes for the transport of Colombian troops, the land route being impassable due to dense jungle. Even today, there is no land connection, road or rail, between the two countries, with the best ‘4×4’ vehicles unable to pass through the muddy swamps and trails. Panama then granted full rights to the U.S. Government to build and administer the Panama Canal, and work began on 4th May 1904 after $40 million had been paid for the French excavations and equipment. John Findlay Wallace was first appointed as Principal Engineer, and then John Frank Stevens between 1906 and 1908. It was Stevens that argued the case against a sea level canal and convinced Theodore Roosevelt of the necessity of a canal built with locks and dams at each end. He rebuilt the Panama Railway dating from 1855, and proposed a canal across the Continental Divide following the route of the railway, which was also used for the disposal of soil from the excavation.

The mosquito had been identified as the cause of ‘Panama Fever’ by Cuban physician Dr. Carlos Finlay, and this was ratified by Dr. Walter Reed of the U.S. Army during the Spanish American War of 1898. Huge investment was then made in proper housing equipped with mosquito nets for the workers, together with extensive sanitation and mosquito control programmes. A significantly lower total of 5,609 workers died from ‘Panama Fever’ and other causes during the period 1904- 1914, bringing the death total for the completed Canal to around 27,500. Landslides during the construction of the infamous and narrow Culebra or Gaillard Cut, when a mountain blocking progress was removed, had also contributed to this total. George Washington Goethals had been appointed Principal Engineer at the end of 1907, and he supervised the completion of the Miraflores and Pedro Miguel Locks at the Pacific end and the Gatun Locks at the Atlantic end. The smaller Pedro Miguel Lock is the limiting factor in the existing Canal for Panamax size vessels. A staggering 152.9 million cubic metres of material was removed during the construction, enough to fill a freight train that would circle the globe four times.

The U.S. Government paid out around $400 million between 1904 and 1914 for the construction of the canal, but it was not until the 1950s that they got their money back with the canal in profit. The question of the design of the canal depended on the suitability of sites at the Atlantic and Pacific ends for the construction of locks and dams, and for the central Gatun Lake above the Gatun Dam. The Gatun dam blocked the Chagres valley with an enormous essentially earth structure 1.5 miles long, 115 feet above sea level, and thirty feet above the planned level of the lake at 85 feet above sea level. The dam was one hundred feet wide at the top, five hundred feet wide at the surface of the lake and almost half a mile wide at the bottom. A discharge of fresh water of 182,000 cubic feet per second was considered workable when all the spillways were open and was likely to be the worst scenario figure. A concrete dam would have been equally feasible but much more expensive.

The lock construction was almost entirely concrete with little use of steel, with the sheer weight of the structures withstanding the loads placed upon them. The machinery of the locks was entirely powered by electricity supplied by a hydroelectric plant next to the spillways. Water was drained or admitted to the locks through tunnels eighteen feet in diameter built lengthwise within the bottom and walls of the lock. The manufacture of the Gatun Locks was started in May 1911, the Pedro Miguel Locks in August 1911 and the Miraflores Locks in September 1912. The lock gates were designed to close to a flattened ‘V’ shape. When open, they slotted into a recess in the lock wall, each individual gate being 65 feet wide and seven feet thick, and varied in height from 47 feet to 82 feet depended on their position. The highest gates were the bottom gates of Miraflores Locks which had to cope with very high Pacific tides.

On 27th June 1913, the last of the Gatun dam spillways gates was closed, allowing Gatun Lake to rise to its full height. Four days later, on the Pacific side where the tide comes in fast, seawater poured in over breaches in a constructed dyke between the Miraflores Locks and the Pacific channel. The seawater could then lap at the closed gates of the Miraflores Locks. Two further days later, the same operation was performed for the barrier below the Gatun locks, and slowly the seawater from two oceans met each other to form a canal for the first time.

The floating crane Alexander La Valley made the first complete transit of the Canal on 7th January, 1914, and the steamer Allianca of 3,150 grt built in 1886 was the first to test the Gatun Locks at this time. Twenty days later President Woodrow Wilson signed an executive order putting into effect the American operation of the new Canal. Some muted celebrations followed when the canal was formally opened on 15th August 1914 with the passage of the single funnelled passenger and cargo ship Ancon of 9,375 grt, completed in 1902 by the Maryland Steel Company at Baltimore for the Panama Railroad Company, a company controlled by the U.S. Government that shared the responsibilities inherent to the operation of the canal. Her sister Cristobal had actually passed through two days earlier, but due to the declaration of war in Europe, the grand celebration with fireworks in the evening of the opening day of the canal was cancelled. Ancon was piloted by Capt. John A. Constantine, the first pilot employed by the Panama Canal administration.

On 24th August 1914, the steamer Pleiades arrived in New York harbour to a water cannon and whistle celebration from all of the tugs and ships in the harbour. She had arrived from San Francisco through the canal with five thousand tonnes of timber and general cargo as the first ship to make the now shorter passage from the west coast. She made her return passage through the canal to San Francisco, the round voyage time taking only half of the previous time via the Magellan Straits. Pleiades was of 3,753 grt and owned by the Luckenbach Steamship Corporation, having been built in 1899 by the Sparrows Point yard of the Maryland Steel Corporation, with triple expansion steam engines from their Baltimore plant.

One of the first shipping companies to operate a New York to San Francisco passenger service through the Canal was the Panama Pacific Line, using the twin funnelled liners Kroonland and Finland in 1915. Also, during the summer of 1915, the entire U.S. Navy mobilised and was reviewed at Hampton Roads, and then proceeded through the Canal in a show of American naval power. In October 1914, a huge landslide at East Culebra or Gaillard Cut blocked the canal, with much time consuming closures and digging out, with the canal not fully operational until April 1916. This problem was never solved e.g. in 1935 and again in 1974 some quarter of a million cubic yards of earth slid into the Cut. An armada of dredgers, steam shovels, small craft and thousands of men had to dig out these landslides. The Gaillard Cut was named after Major David Gaillard, Commissioner of the original Isthmian Canal Commission (ICC), and Chief Manager of the Central Division of the Canal.

A dry dock was built at each end of the Canal for ships needing attention before making a transit. The Mount Hope Dry Dock at Cristobal on the Atlantic side had dimensions of 117.8 metres by 17.91 metres wide with a high water height over the keel blocks of 6.55 metres, and had a 35 tonne travelling crane and was suitable for ships up to 10,000 dwt. The Balboa Dry Dock on the Pacific side was bigger at 338.3 metres (1,044 feet) by 33.1 metres wide with a high water height over the keel blocks of 14.02 metres. It had two travelling cranes of 26 tonnes and 50 tonnes at an outreach of 18.3 metres and was suitable for ships up to 60,960 dwt. A smaller dry dock at Cristobal had a cradle length of two hundred feet, a clear width of 42 feet and a high water height over the keel blocks of 15 feet eight inches. The impressive headquarters building of the Panama Canal Company was built on a high hill at Balboa Heights at the Pacific end. The company had American Presidents and Vice Presidents e.g. Colonel Chester Harding and Major E. A. Drake in the 1920s, and Major General David S. Parker and Colonel Charles McGinnis in the 1960s.

The operation of the Canal is very dependent on the hydrology of the Panama isthmus, as water is fed by gravity from Lake Gatun, with a surface area of 166 square miles, and is lost into the ocean every time the locks are opened and closed to raise or lower ships through the existing six locks. The Gatun Dam, near the top of the three Atlantic locks, created the artificial man made Lake Gatun, which acts as the main reservoir for the Canal and is the central section. However, by 1930 the water supply to the locks became an issue, and a second dam, the Madden Dam, was built to hold back the upper Chagres River to create Madden Lake (later Alhajuela Lake) as an additional water storage area for the Canal.

Vessels use their own propulsion for the greater part of the transit, but are assisted when passing through the locks by electric locomotives, known as ‘mules’, which use cables to align and tow the ships. Working in pairs, the locomotives move on rails and keep the vessels in position within the lock chambers. Depending on its size, a vessel may require the assistance of between four to eight locomotives. The lock sizes are 1,050 feet (320 metres) by 110 feet (33.5 metres), although the longest vessel that can safely be accepted for transit is 965 feet in length.

The Panama Canal played an important part during World War II, particularly for the transfer of the American fleet and war munitions from the Atlantic to the Pacific, but plans to widen the locks were not carried through to fruition during the 1950s. On 20th May, 1942, the Miraflores Swing Bridge was inaugurated as the first permanent mode of ground transportation across the canal. In 1951, the Panama Canal Company replaced the Panama Railroad Company and The Panama Canal administration, and took over the duties of maintaining and operating the Canal in a businesslike administrative and financial structure. At the same time, the Canal Zone Government took over the duties of civil affairs. In 1963, round the clock operation began with the installation of new fluorescent lighting in the Gaillard Cut and in the three sets of locks. The first widening of the Gaillard Cut from 91 metres to 152 metres width began in 1954 and was completed in 1970.

Panama Canal Treaty

On 1st October 1979, the famous Panama Canal began a new stage in its history. Two signatures from American President Jimmy Carter and General Omar Torrijos Herrera, Head of the Panamanian Government, on 7th September 1977 in Washington created a Panama Canal Zone of 50 miles long and 10 miles width, which reverted to Panamanian control. This was ratified by the Panamanian people in their ‘Plebiscite Sunday’ vote on 25th October 1977 for this Panama Canal Treaty in a referendum. However, the process of delivering all of the infrastructure in the old Canal Zone took another 20 years to conclude by the 1st January of Millennium Year, when Panama assumed full responsibility for the administration, operation and maintenance of the canal. A Government institution called the Panama Canal Authority (ACP) then assumed the responsibility for the waterway. The ‘L’ shaped ACP administration building stands proudly on a hill overlooking Panama City and the famous Canal.

Canal Tolls

The Canal dues have increased vastly over the history of the Canal, the most expensive toll for a cruise ship to date has been $331,200 for Disney Magic on 16th May 2008, whereas $165,236 was charged for Rhapsody of the Seas when completed in 1997. The average toll for a very large cruise ship transit in 2014 is $250,000. The highest fee for priority passage charged through the Transit Slot Auction System was $220,300, paid on 24th August 2006 by the Panamax tanker Erikoussa, bypassing a 90 ship queue waiting for the end of maintenance works on the Gatun locks and thus avoiding a seven day delay. The charter of the tanker must have been a very urgent and expensive arrangement.

However, the least expensive toll was 36 cents to American adventurer Richard Halliburton, who swam the Canal in 1928, the sum having been calculated from the displacement of his body. He took ten days from 14th August to 23rd August to complete his swim. However, the tolls for most ships are charged according to vessel type, size and type of cargo carried or whether in ballast e.g. a container ship paid $72 per TEU effective from 1st May 2009. The toll is charged differently for container ships carrying no containers in ballast, and is dependent on the draft of the vessel.

Large passenger ships are usually charged $92 for unoccupied berths and $115 for occupied berths, smaller passenger ships of less than 30,000 grt are charged on the same ‘per ton’ schedule as cargo ships. NCL Cruises will make fifty transits of the Panama Canal during the cooler October 2015 to April 2016 season. The huge cruise liners Norwegian Jewel, Norwegian Pearl, Norwegian Star and Norwegian Sun will each be charged between $250,000 to $300,000 per transit. Small yachts and vessels between 50 feet and 100 feet in length pay between $1,300 and $2,400 to transit the Canal, and the average payment charged for all vessels is just over $65,000 in 2014. Tolls had been increased by 12% to 16% in January, 2011, so that a fully laden Panamax container ship of 4,200 TEU capacity then paid $344,400 in tolls, with container ships now accounting for more than half of the Canal’s annual revenue of $2 billion. Container ships are today charged $925 for the first fifty TEU of containers, then $4.30 for each additional TEU, so that a fully laden ‘Super Post Panamax’ container vessel of 14,050 TEU capacity, the maximum after expansion, would pay $602,925 when the expanded canal is in operation.

The ACP intends to double the tolls over a twenty year period at an annual rate of 3.5%. The increased capacity of the expanded canal was projected to increase annual revenue three fold to $6 billion as against $2 billion when the expansion project started. ACP net profit in 2007 was $806.65 million, of which half was forwarded to the national treasury of the Government of Panama. However, between $1.5 billion and $2.3 billion needed to be raised from international banks in the form of extended loans and bonds for the project to be given the go-ahead. Fourteen new tractor tugs of 330 grt and 5,000 bhp were ordered from a Hong Kong yard and have since been completed with names such as Bocas del Toro, Los Santos, Rio Bayano, Rio Indio and Rio Tuira. These tugs are essential for the new third lane as ships are towed and guided through together using a computerised guidance system instead of the use of locomotives (mules).

Recent Canal Maintenance

The Panama Canal Authority or Autoridad del Canal de Panama (ACP) has invested $1 billion in a widening and modernising programme for the Canal, particularly the straightening of the Gaillard Cut to allow very large vessels to pass each other, and the deepening of Lake Gatun to reduce draft restrictions and improve water supply, and the deepening of the Atlantic and Pacific entrance channels. The lock locomotives have been modernised or replaced, together with their tracks and new lock machinery controls, and a new traffic management system to allow more efficient control over ships in the Canal. The ACP inherited on the first day of Millennium year an ageing infrastructure with problems such as cracks in the concrete of the locks and much deterioration of the machinery that opened and closed them. The canal had prior to this date been closed for essential maintenance on many occasions. The owned floating crane Oceanus equipped with a 100 tonne heavy lift and completed in 1996 by Moss Point Marine Inc. at Escatawpa on the Mississippi helped in these maintenance periods. Long queues of ships waiting at least five days at either end had produced much frustration among shipowners.

The second Culebra or Gaillard Cut widening was completed on 6th November 2001, and increased the width from 152 metres to a minimum of 192 metres in straight sections and up to 222 metres on curves. This allowed safe two way navigation of the largest Panamax vessels, however, the huge increase in the size of most types of ship to Panamax size and beyond has meant that the Canal has now reached its maximum capacity. A yearly figure of over 14,000 transits in the last few years gives a total figure of around one million ships that have transited the canal since its inception. Transitting vessels pay Canal tolls in advance at an authorised local bank, usually through their shipping agents. Transit reservations are available to a limited number of vessels, and allow reservation of transit slots up to a year in advance by paying a preferential fee.

Canal Expansion Project (Third Set Of Locks Project)

This massive $5.3 billion project was approved in a referendum by the Panamanian people on Sunday 22nd October 2006, and the project officially started on 3rd September 2007. Some excavation work that was done seventy years ago for an earlier Third Set of Locks Project has been utilised in the new expansion project. The existing Canal today has two lanes each with its own set of locks. The project consists of adding a third lane through the construction of three-step lock complexes at each end of the Canal. One lock complex will be located on the Pacific side to the southwest of the existing Miraflores Locks. The other complex will be located to the east of the existing Gatun Locks. The locks will have three consecutive chambers designed to move vessels from sea level to the level of Lake Gatun and back down again. Each chamber will have three water saving basins, to give a total of nine basins per lock and 18 basins for the whole project. The new locks and without the use of pumps, as in the present system. The new locks will be connected to the existing channel system through new navigational channels. There were
three dry excavation projects :-

– A two mile (3.2 km) access channel has been excavated to connect the new Atlantic locks with the existing sea entrance.
– On the Pacific side, a 3.9 mile (6.2 km) north access channel will connect the new Pacific side lock with the Gaillard Cut, circumventing Miraflores Lake.
– On the Pacific side, a 1.1 mile (1.8 km) south access channel will connect the new lock with the existing sea entrance on the Pacific Ocean.

All of these three new channels will be 715 feet (218 metres) wide, both on the Atlantic and Pacific sides, to allow Post Panamax vessels to pass each other in both directions. Tugboats will be used in each of the two new lock complexes, instead of locomotives (mules) in the existing locks, together with a computerised guidance system. This project with its three new channels will raise the level of Lake Gatun by 1.5 feet, and thus give the canal an extra 165 million usable gallons of water. The project will not affect the water supply for human use from the Alhajuela and Gatun Lakes. The new lock chambers will be 1,400 feet (426.72 metres) by 180 feet (54.86 metres) wide and 60 feet (18.29 metres) deep. They will use rolling gates instead of miter gates on the existing locks. Rolling gates are used in all existing locks throughout the world with these typically huge dimensions.

The $3.1 billion contract to build the two new locks and water saving basins was awarded on 18th August 2009 to Grupo Unidos por el Canal (GUC), a consortium of Spanish, Italian and Panamanian companies. This contract will also result in dredging work costing $100 million by the Jan de Nul company of Northern Belgium. The design of the locks is a carbon copy of the Berendrecht lock in the Port of Antwerp, which Jan de Nul helped to build in the 1980s, with the company still employing engineers and specialists who worked on that project. The first of the three dry excavation projects began on 3rd September 2007 with the cutting of the huge trench connecting the Culebra or Gaillard Cut to the new Pacific lock, necessitating the removal of 47 million cubic metres of soil and rock. The start of this excavation project featured a public display, which was watched by large crowds on Paraiso Hill near Panama City. The last of the three dry excavation contracts valued at $268 million was awarded in January, 2010 to Grupo FCC-ICAMECO, a consortium of Spanish, Mexican and Costa Rican companies. As at April, 2010 some $4 billion worth of contracts had been awarded, with two of the three dry excavation projects very nearly complete. The Pacific Ocean entrance channel is being deepened by Dredging International in a $177 million project.

Almost all of the labour force of 6,500 to 7,000 workers required during the peak years of construction between 2010 and 2013 have been Panamanian. The engineers and specialists of the ‘big dig’ will all be Spanish speaking, and the Panamanian Government and private companies have jointly trained the workforce so that they have the necessary competencies, capabilities and certifications. The whole project was hoped to be complete by 15th August, 2014, exactly a century after the original opening of the existing canal, but has overrun to Spring 2015. A $300,000 bonus per day for each day the locks are delivered ahead of schedule was hoped to ensure the completion of the project on time and on budget. ACP officials stated that the most important impact on employment will be in the medium and long term, coming from the economic growth brought about by extra income generated by the expanded Canal, thus increasing the wealth of Panama, which is largely dependent on the revenue from their great Canal.

Vessels entering the waterway from the Pacific Ocean sail past the small islands of Flamenco, Perico and Naos and the rocky Amador Causeway and then under the Bridge of the Americas and past the port of Balboa. Post Panamax vessels will then use the new lock complex to be raised up, whereas vessels of Panamax size or under will use the existing Miraflores Locks. The two routes will join together in the Culebra Cut to sail past the Gamboa station and then cross Gatun Lake by the circuitous route around Barro Colorado Island. On reaching the Gatun Locks, Post Panamax vessels will take the new lock complex to the east of the existing locks to be lowered back down to the Caribbean side and the ports of Cristobal, Manzanillo and Coco Solo.

In order that the expansion project will be financially viable, the ACP has informed all of its customers that tolls will double by 2025, however these increases will be made in consultation with customers and industry partners. The ACP pilots will have to guide these huge Post Panamax ships with their usual skill and precision. The first Post Panamax container ships were five ‘C10’ class built for American President Lines with a beam of 39 metres and a capacity of 5,300 TEU in the early 1990s, followed by 25 units of the ‘Regina Maersk’ class of 7,100 TEU capacity beginning in February 1996 for the world leader, Maersk Line. Evergreen Line and Maersk Line container ships are in fact the most frequent users of the Canal today. During the history of the Canal, some ‘Panama Canal Honorary Pilots’ have been appointed, including Capt. Raffaele Minotauro of the famous Italia Line, and more recently Commodore Ronald Warwick of Cunard Line, who traversed the Canal more than 50 times on the QE2 and other great Cunard liners.

Giant Lock Gates and Engineering

The project called for the construction in Italy of sixteen giant rolling steel lock gates measuring 57.63 metres in length, ten metres wide and 31.92 metres high. The Pacific side lock gates are the heaviest and weigh 4,163 tonnes each, and construction of the lock gates had begun in October 2011 by Cimolai spA of Italy. The new locks have a total of sixteen rolling gates, eight for each new lock complex, and unlike the current locks which use miter gates, the new expanded lane uses rolling gates. The first shipment of four rolling gates arrived in Panama from Italy on 20th August 2013, the second set of four arrived on 10th June 2014, the third set of four arrived on 8th September 2014. The final set of four lock gates is expected at the end of January 2015 with final completion of the whole project in Spring 2015. The gates were carried on Chinese heavy lift ships such as Xia Zhi Yuan 6 owned by Cosco and were unloaded at Panama on to a special temporary dock.

Two new waiting and mooring areas for ships have been created at the Pacific side of the canal, and new lighting systems at the locks give greater service reliability and avoid collisions. These ancillary improvements are regarded as essential to the functioning of the new locks. The giant engineering work can be summarised in the following six segments :-

– Pacific Access Channel
– Gatun Lake and Culebra Cut Dredging
– Design and Construction of the Third Set of Locks
– Pacific Entrance Dredging
– Atlantic Entrance Dredging
– Raising the maximum operating level of Gatun Lake to improve water supply to the new locks

These six giant engineering segments were between 80% and 100% complete as of September 2014, with most of the outstanding work to be completed on the
Third Set of Locks. Almost five miles of new channels on both the Atlantic and Pacific side have been dug to lift giant ships from one end to the raised level of Gatun Lake around ninety feet above sea level and then lower them at the other end. It was essential to raise the level of Gatun Lake as the amount of water needed for the new sets of locks would strain its resources in the dry season. The wet season however provides plenty of water from the Chagres river into Gatun Lake.

ACP and the Impact Of The Canal Expansion

The ACP is governed by an appointed eleven member Board whose Chairman is appointed by the President of Panama and who is also the Minister of Canal Affairs with a cabinet seat on the Government of Panama. The autonomous canal budget is set by the ACP annually, with the canal making a huge surplus, and usually half of the profit goes to the treasury of the Republic of Panama. The canal thus pays no taxes and with a prohibition of strikes by its 9,210 employees, the ACP and the Panama Canal is central to the economy of Panama.

The ACP began six years of research, economic feasibility studies, market demand, environmental impact and technical engineering before giving the green light to the project. The effect of the expansion to the environment of the small country of Panama should not be underestimated, as almost three square miles of mangrove forest has been destroyed during the building of the new third lane. This has threatened the welfare of the local flora and fauna, and other deforestation due to logging and clearing of land for further agricultural use could lead to more catastrophic flooding during the wet season. The huge amount of rock and earth excavated by the project has been deposited elsewhere in the canal infrastructure, and will create more environmental challenges for this small country.

The project plan for the expansion called for each new lock to contain a basin allowing displaced water to be reused rather than escaping into the sea. Fortunately, the waters of the Chagres river are sufficient to cope with the increased water demand at least in the wet season. The Chagres river water also provides the drinking water for the population of Panama, and there have been huge worries about the supply of rain water for these two purposes ever since the first canal was mooted well over one hundred years ago.

Fifteen thousand ship transits per year at present will increase to twenty thousand ship transits per year when the expanded canal is open, with the percentage of world sea-borne trade passing through the canal increasing to 10%. The new 203 hectare international cargo handling area at the Atlantic end will help increase feeder traffic and includes a rail interchange. The GDP growth within the Republic of Panama will increase by two percent per year due to the big canal increase in trade until the year 2025. The discovery of some 900 million barrels of crude oil reserves in Panamanian territory in August 2011 will provide taxes and royalties of over $15,000 million over the next twenty years. A GDP growth figure of 8% in 2012 will thus rise to at least 12% per year for the next twenty years due to these two factors.

However, the case for the expanded canal in terms of market demand was overwhelming. The percentage of container ship traffic through the canal from Asia to the U.S. Gulf and Atlantic Seaboard was only 40% in 2007, and this will immediately jump to 60% on the opening of the third lane. Container ships of up to 14,000 TEU capacity and loaded bulk carriers up to 170,000 dwt will now be navigating faster between the two oceans via the expanded canal. This will have a direct impact on economies of scale and international maritime trade. It will not be an exaggeration to say that the expanded Panama Canal will shape the future of container ship operations, as well as bring new trade in other types of shipping to the Caribbean, North American, South American and Pacific areas as a whole.

First Crossings

The 9,606grt Ancon was an American steamship that became the first ship to officially transit the Panama Canal in 1914 as seen above. She was built in 1902 by the Maryland Steel Co. at Sparrow’s Point as the Shawmut for the Boston Steamship Line. About 1909 she was purchased by the Panama Railroad Company to provide shipping required for the construction of the Panama Canal. The name was changed to Ancon after Ancon Hill and Ancon township in Panama, home to the head of the Canal Commission. Ancon and her sister ship Cristobal played a crucial role in building the canal, bringing workers and supplies, notably massive amounts of cement, from New York to Panama for the construction project. On 15th August 1914 Ancon made the first official transit of the canal as part the canal’s opening ceremonies, although her sister ship Cristobal (below) had made the first unofficial transit on 3rd August, delivering a load of cement, while an old French crane boat Alexandre La Valley had crossed the canal from the Atlantic in stages during construction, finally reaching the Pacific on 7th January. Ancon was acquired by the United States Navy from the US Army just after the end of World War I and fitted out as USS Ancon (ID-1467), a troop transport to return Americans home. She was decommissioned the following year and returned to the Panama Railroad Company. In 1940 they renamed her Ex-Ancon and in 1941 she was sold to Permanente SS Co. and renamed Permanente. In 1946 she moved to Tidewater Commercial Co. Inc. as Tidewater and that company renamed her Continental in 1948. In 1950 she joined Bernstein Line and reverted to her original name of Ancon, but on 26th October of that year she arrived at Savona to be broken up by Trosidea Ricuperi Metallici. The 9,606grt Cristobal was built in 1902, also by Maryland Steel Co. as the Tremont for the Boston Steamship Line. She too joined the Panama Railroad Co. in 1909. In 1941 she followed her sister to Permanente SS Co. as Philippa and in 1950 she became Esmeralda of Cia de Nav. Penomone. She was broken up by Michele Sciantico at Bari in May 1951.