Jun 2016 Financial News

High hopes for boost to global trade as Panama Canal expansion opens

Jun 28, 2016

COLON, Panama (VOA) — Panama officially opened an addition to its fabled sea canal Sunday for a new generation of super cargo ships, capping a nine-year, US$5.4 billion expansion project that will double shipping capacity and impact global trade routes.

Panamanian President Juan Carlos Varela unveiled the refurbished canal as the giant container ship Cosco Shipping Panama made its way through a string of locks on the 77-kilometre Isthmus of Panama. “This the route that unites the world,” Varela told a crowd of about 30,000 people who gathered to witness the inaugural trip through the vital waterway.

Various foreign dignitaries, including the presidents of Taiwan, Chile and several Central American nations, attended.

Andrew Holness, prime minister of Jamaica, and his transport minister Mike Henry were also in attendance.

“There is evidence that the Panama Canal, with this expansion, is an important player not only for maritime commerce but worldwide,” said Panama Canal Authority Executive Vice-President Oscar Bazan. “[Clients] will benefit from not only saving time but also money because the canal is a route that shortens distance.”

The latest generation of gigantic carriers — more than 46 metres wide and 275 metres long — could not fit through the 102-year-old canal. Unable to reach the US East Coast by sea, many of the mega-carriers from Asia unloaded their goods in the ports of Los Angeles and Long Beach for shipment by rail to the rest of the country and beyond.

Many of the so-called ‘Neo-Panamax’ ships able to navigate the canal will be stacked with containers nearly 15 storeys high. Others will carry cargoes of grain, natural gas and other goods nearly three times larger than before.

Thousands of spectators watch as the Neopanamax cargo ship, Cosco Shipping Panama, prepared to cross the new new Agua Clara locks, part of the Panama Canal expansion project, near the port city of Colon, Panama.

Analysts say the canal’s annual cargo volume should double over the next decade, stoking hopes among Panamanian officials the tiny Central American country could triple the US$1 billion in annual shipping fees it currently collects.

The revitalised canal has also spurred vast construction projects at ports on the US East Coast and Gulf of Mexico. The ports of Miami, New York and Houston have deepened their harbours, expanded rail access and installed gigantic cranes to service the massive ships.

The Port Authority of New York and New Jersey will spend more than US$1 billion to raise the height of the roadway on the bridge connecting Staten Island to Bayonne, New Jersey, to accommodate the huge carriers. Leaving the clearance of the 85-year-old bridge at 46 metres would, according to economists, risk the eventual obsolescence of the Port of New York; North America’s largest seaport.

Port of Miami director Juan Kuryla and US Congresswoman Frederica Wilson told the

Miami Herald newspaper she expected the canal expansion and the US$1.3 billion in local port improvements to accommodate the bigger ships will bring “thousands of high-paying jobs” to south Florida.

— Additional reporting by the AP and AFP

Source:
Jamaica Observer
Tuesday June 28, 2016

http://www.jamaicaobserver.com/news/High-hopes-for-boost-to-global-trade-as-Panama-Canal-expansion-opens-------_65359