Will the Panama Canal Meet Increasing Capacity Needs?

For the Canal, the U.S. is a major force in international trade. As the study points out, about 65% of all cargo transiting the Canal is either coming from or going to the U.S. Of 135 million tons of cargo in fiscal year 2004, 85 million tons was U.S. exports, 54 million tons was imports and 2 million tons ran domestic inter-coastal waterways. Looking only at U.S. container traffic through the Canal, goods are estimated at $100 billion.

Traffic through the Canal continues to grow and the Panama Canal Authority is well aware of constraints, making improvements to improve capacity over the next several years. The Authority has other, long range plans in place as discussed by Rodolfo Sabonge, its director of corporate planning and marketing in an article, “Root Canals,” in the October 2005 edition of Logistics Today.

Because of continued congestion at West Coast U.S. ports, the Panama Canal (and the Suez) has seen an increasing number of transits by cargo vessels moving to the East Coast. As the report points out, there are infrastructure problems among East Coast ports and that even if the Panama increase its capacity over the next 10 years by another lane and additional locks, it may simply be transferring congestion from one Coast to the other.