Two years ago this month, the Panama Canal completed a massive expansion project, valued at $5 billion. It was a long time coming, and the project certainly weathered some storms, like a major downturn in maritime shipping in 2014. The project was proposed in 2006, quite some time before the recession.
But even more noteworthy than the adversity the project overcame are the ripple effects from the expanded Panama Canal. The canal’s two new sets of locks and excavated channels, which began operation on June 26, 2016, have opened the door for larger ships. They’ve also contributed to a rise in shipping traffic on East Coast ports.
Neo-Panamax and the Panama Canal
The Panama Canal expansion was carried out to accommodate larger, neo-Panamax vessels, which prior to the expansion had no convenient way to reach the U.S. East Coast from Asia. These ships have almost triple the cargo capacity of Panamax ships.
The overwhelming majority of these vessels are container or liquified natural gas (LNG) tanker ships. By this date, more than 2,000 of them have likely passed through the canal, headed for American ports like New York, Savannah and Charleston, among other destinations.
East Coast ship traffic
Right now, eight U.S. ports are able to accommodate neo-Panamax ships. Many of them have recently undertaken dredging projects and other improvements to help them cater to even more vessels. The Port of New York and New Jersey has even completed a project to raise the Bayonne Bridge to 215 feet.
Dredging projects have also taken place in Charleston and Savannah. Thanks to the Panama Canal’s expansion, the latter port now accommodates more neo-Panamax vessels than any port on the East Coast, although the Port of New York and New Jersey remains the largest in size.
Because of the increased traffic in Savannah, CSX and the Georgia Ports Authority now hope to construct a 388-mile railway line from the city of Savannah to I-75 in northwest Georgia. Ports on the Gulf and East Coast expect stable growth for years, and trucking companies are already starting to see an increase in business in the eastern United States.
As you may expect, the Panama Canal has set new tonnage records since expansion. Records have been set for both cargo and passenger ships.
In fact, both of these marks were set about a year apart from each other. First, in May of 2017, the COSCO, a 13,092 TEU container ship, became the largest vessel to transit the canal. Then this past May, the Norwegian Bliss became the largest passenger ship (at 168,028 gross tons) to pass through the locks. May 2018 also set a monthly tonnage record (38.1 million tons) for the canal. All in all, a whopping 1,231 vessels transited from Atlantic to Pacific last month.
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