The first vessel entered the brand new expanded Panama Canal on Sunday morning, which made the Chinese ship the one to inaugurate the $5.4 billion improvement that could reshape the world’s trade routes.
At 7:50 a.m. the vessel named Cosco Shipping Panama entered the Agua Clara lock on the Atlantic, to continue its way by crossing the 50-mile-long waterway. The ship was expected to emerge on the Pacific side by 5 p.m., as reported by Reuters.
The new canal will double the route’s capacity, despite the worldwide economic uncertainty in the shipping industry. The expansion also allows the small country to host up to 98 percent of the world’s shipping.
“It is a one-time experience, a great achievement,” said Felicia Penuela, a housewife from Colon province, where the inauguration took place among cheers and fireworks. “Panama is showing the world that even though it is a small country, it can do great things.”
Panama hopes that the project will bring $2.5 billion per year in added revenue, an amount that represents 2.8 percent of the gross domestic product. The construction of the expansion was delayed for about two years, due to strikes and unprogrammed delays, as reported by NBC.
According to Oscar Bazan, the Panama Canal Authority’s executive vice president for planning and commercial development, there is evidence that the expanded Panama Canal is an important player not only in regional maritime commerce but worldwide as well.
The canal is winning a bet, Bazan commented, and the clients will benefit from saving not only time but also money due to the canal is a route that shortens the distance. In an attempt to keep traffic coming, the Suez Canal in Egypt recently lowered its prices by up to 65 percent on large container carries.
Nearly 170 ships have already signed up to use the expanded Canal, and the Panama Canal Authority has set up a $17 billion plan for the fourth set of locks to lure even bigger ships that can usually only pass through the Suez Canal, but these plans are only viable if the industry perks up.
— Panama Canal (@thepanamacanal) June 26, 2016
The original project was due to October 2014, which coincided with the canal’s 100th anniversary, but presented several problems such as slow approvals of concrete to use in the locks and leaks detected last year, as reported by the Washington Post.
The new construction included two new set of lock complexes, one on the Pacific coast and the other on the northern coast at Colon. The locks, 180 feet wide and 1,400 feet long, are big enough to support larger vessels than previously allowed on the route.
Those larger vessels such as the New Panamax-class vessels can carry more than 14,000 containers, and are seen as the future of global shipping. The International Monetary Fund predicted that the expansion will reduce global maritime shipping cost by $8 billion per year.