Panama Canal Expansion

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Expansion of the Panama Canal & Heartland Barge
The Panama Canal enables the ships sailing from the Pacific Ocean to the Atlantic Ocean (and vice versa) to save time and fuel by avoiding the travel around the tip of South America. The savings in time equal half of the time previously taken by ships to do the same. The size of ships that are used in shipping containers has drastically increased due to the container revolution. To enable the new and bigger ships such as Maersk Triple E Class to pass through and to increase the toll that is collected on every ship, the Panama Canal Authority has decided to undertake the expansion of the Panama canal. This event has impacted world trade and companies all over the world.

As of now, the New Panamax ships with drafts of 45 ft delivering containers from Asia to the east coast of the US cannot pass through the Panama canal and therefore dock at the ports of Los Angeles and Seattle on the west coast and transfer their containers to railroad companies to transport the goods to the east coast. But when the expected expansion commences in 2015, some of these ships would be using the canal to directly reach the east coast of the US To get a piece of this action, several ports on the east coast have undergone upgrade and increased their depth to at least 50 ft to allow the New Panamax ships to reach their container port facilities. Although the U.S. Army Corps of Engineers (USACE) itself has indicated that deepening isn’t expected to increase the volume of container traffic coming through ports, the reality is that not deepening could cost the port a significant amount of volume, relegating it to “lower tier” port status.

New Panamax vessels today make up 16% of the world’s container fleet, but account for 45% of the fleet’s capacity,” By 2030, new Panamax vessels will account for 62% of the capacity of the world's container fleet. The potential transportation cost saving of using new Panamax size vessels to ship...
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