Panama Canal says Deal with Consortium to be Signed This Week

Work on the project to expand the canal began again on February 20th, after rows about cost overruns had stalled construction since the start of the year.

A preliminary accord between the two parties, reached on February 27th, now sets an end-2015 deadline for completion of the work. For some in the Caribbean, further delays would suit their purposes.

When they eventually swing open, Panama’s new canal locks will reshape the geography of world shipping.

The largest ships to squeeze through the existing locks need a water depth of just over 12 metres, and can carry around 4,400 containers. The new locks will accommodate ships which can take almost three times that load and need a draft of over 15 metres.

These monsters will slash shipping costs for Pacific cargo en route for Atlantic ports, and boost the 6% share of world trade that the Panama canal now claims. But few ports have the water depth needed to enable the new Panamax ships to dock. Lots of cargo will be unloaded onto smaller ships at a few “transshipment” hubs, before being shipped to their final destinations, and several Caribbean islands are vying for the business (see map).

Continue reading (external link): Ripple effects

Related: SC24/7 “Panama Canal”