Transportation and Panama Canal

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Table of Contents

Introduction
Organization and Management of the Panama Canal
What Ails the Transportation System at the Panama Canal?
Conclusion
References

Introduction

Cutting across the Atlantic and the Pacific Ocean, the Panama Canal has become one of the leading infrastructures that have transformed the transportation sector in America and Europe. As a resort to solve the problems that aided trading between the Americans and Britain in the 1800s, the great Panama Canal was constructed. This was an effort to facilitate efficient and quick delivery of trade goods between the two continents. A trans-isthmian Canal then would influence the development of ports and trade routes, which would impact the volume and magnitude of global trade. The Panama Canal achieved all this. At its official opening in 1914, it redefined transportation in history and has been doing so till today. This analysis will highlight the organization and management of the Canal, its workmanship, and the techniques used in running the transportation system. It will also address how the system works from the ground level, what gets transported through the Canal, and how it gets transported. This essay will address some of the issues that influence the Panama Canal transportation system.

Being a project of the United States, the Panama Canal also became a symbol of supremacy. It was a physical representation of the Americans’ capability to control the most fundamental aspects of the global economy (Office of the Historian, 2022). One hundred years later, the Canal was widened to accommodate the bigger ships that currently dominated the Pacific and the Atlantic waters and increase the capacity by double (Miller & Hyodo, 2021). The Canal’s widening came when total control had already been granted to the Panama Canal Authority under the Panamanian government (History, 2019). This enabled organization and proper management of the Canal, leading to efficient services.

Organization and Management of the Panama Canal

At the point of its construction, the Panama Canal was under the control of the American government. This was attributed to the fact that they initiated, coordinated, and financed the project (Sabonge, 2017). In doing so, the Panamanian people lost sovereignty over that Canal Zone. Under the management of the United States of America, the Canal was operated as a nonprofit public utility (Sabonge, 2017). This meant that the transportation system was privately owned by America and worked to supply essential services to the people of Asia and America with no priority on generating profits. Any additional revenue that exceeded the Canal’s expenses was reimbursed and used to further the project’s purpose.

Nonetheless, after the transfer of control in 1999, the Panamanian government redefined the franchise’s business model (Sabonge, 2017). This new model included the establishment of the Panama Canal Authority that made it possible for the Canal to be operated more like a corporation that prioritized profit generation. This would, in turn, increase the revenue received by the government from the transportation system, initiate economic development, provide wealth, and ultimately improve the lives of Panamanians.

The workmanship of the Panama project has sustained transportation through its craftiness. The Panama Canal is a 48 miles long waterway that allows up to 14,000 vessels through its waters a year (Miller & Hyodo, 2021). Connecting the Atlantic to the Pacific Ocean, the Canal provides a faster way for ships to connect from Asia to the United States of America, escaping a trip to the tip of South America. The Canal has a lock system that releases water to the waterway to elevate ships at certain sections of the Canal (Miller & Hyodo, 2021). The locks are required to raise the vessels to 85 feet above sea level from where they get by the Gatun Lake towards the other side. After the lake, the locks on the other side lower the ship to the normal sea level (Miller & Hyodo, 2021). For the longest time, the United States of America has been the leading beneficiary of the Panama project.

Late until the sovereignty of the Canal was handed back to the Panamanian government, the citizens of the country had not quite experienced the economic development the Canal had had at the global level. The Canal allowed America access to its vast number of trading partners on the other side of the world (Office of the Historian, 2022). By reducing the distance used by carriage vessels by 5,000 miles, the Panama Canal created an alternative connection that had disappeared following the split of Germany after the Second World War (Office of the Historian, 2022). Other countries that highly rely on the Canal include the People’s Republic of China and Japan (Office of the Historian, 2022). It can be urged that they make up the top five countries that use the Canal the most because of their dealings and interactions with America.

The principal cargoes that get transported through the Panama Canal are vast. They include crude oil and its products that make up 32% of the total trade (the most significant percentage) (Sabonge, 2017). Other products include containerized trade (15.5 %), iron ore (11.7%), coal (11.1), grain (3.9%), and other trade commodities that make up the remaining percentage (Sabonge, 2017). These cargoes are transported through vessels that are also classified. The dry bulk carriers transport grains of all kinds (Sabonge, 2017). They can also carry steel manufactures, fertilizers, iron ore, coal, among other dry bulk commodities. On the other hand, tankers transport crude oil and the products from the refinement and can also carry any chemical product.

Gas carriers, from their names, transport natural and petroleum gas. Refrigerated vessels store and transport perishable goods. These can include dairy products, fruits, or flowers. Container vessels are specifically created to transport containers that contain general goods (Sabonge, 2017). Vehicle carriers, also from their names, carry cars, car parts, or any heavy equipment. Finally, cruise ships are also featured in classifying vessels through the Panama Canal. They fall under the line of entertainment and are rarely used for cargo transportation (Sabonge, 2017). The Canal management has used recent vessel tracking technology, weather monitoring systems, and new, improved propeller engines to reduce transport costs. This ultimately also offers efficient services when it comes to vessel transportation.

What Ails the Transportation System at the Panama Canal?

Competition from Other Waterway Systems

Since its completion and opening in 1914, the Panama Canal has served the world with quick and affordable transportation services. This has lasted for many years, but with other technologies, other water transportation systems have been built to offer almost the same services as the Canal. For instance, the Suez Canal has been termed a potential alternative for the Panama Canal (Wang, 2017). Being a waterway that services Asia and Europe trade routes, the Canal is rising to become an alternative trade route that could take cargo from the Asian continent to the American East Coast (Wang, 2017). Furthermore, the introduction of intermodal transportation has created disjunctive routes for cargo ships (Wang, 2017). Since 1984, North America’s introduction of the DST services (an example of intermodal transportation) has resulted in a visible deterioration in the economic significance of the Panama Canal. The prime principle of intermodal transport is its flexibility in the transportation of large-sized cargo.

Despite its reliance on ships, this form of transportation takes away the spotlight that highlights shipping as the only reliable resort. Through other modes of transportation such as rail or/and trucks, the intermodal transfer becomes a more efficient and reliable mode of transportation. Another major competition anticipated by the management of the Panama Canal system is the Nicaragua Canal, which is still under construction. The Canal will connect the Caribbean Sea to the Pacific Ocean (Notteboom et al., 2021). At its completion, it is anticipated to accommodate vessels more enormous than the ones accommodated by the Panama Canal. This is because the project has a minimum water depth of 26.9 – 29.0m which would suit vessels with a draft of 24 – 26m (Notteboom et al., 2021). Unlike the Suez Canal, the Nicaragua Canal will provide cargo ships faster and affordable access to the American coastline from the Pacific Ocean, making it the most suitable trade route.

Constraints of Vessels and the Limiting Capacity of the Lock Systems

The initial Panama canals were constructed with a width length that supported the size of most of the vessels that were coming through it at that time. With the recent heightened production of mega vessels, the initial lock systems are being rendered useless (Wang, 2017). Hence, increased constraints of vessel size as a result of the limitations of the lock’s width in the Canal system have increasingly been recorded. This resulted in the need for expansion. Despite the advantages, a wider Canal brought to the entire Panama shipping system, the limiting Capacity of the new lock system has become another problem (Wang, 2017). The new expansion project only introduced a single broader and deeper water pathway that would allow the new, large, and refined Panamax vessels to go through the Canal. The maximum capacity of the new lock systems is already becoming a concern (Wang, 2017). As much as the vessels can carry twice the size of their predecessors, Canal traffic is still an issue at the Panama Canal because of the limiting capacity of the new lock system.

Climate

Another factor that affects transportation in the Panama Canal system is the climate. Occasionally, bouts of drought brought about by the El Nino season significantly reduce Gatun Lake’s water level, which is a major part of the Canal system (Timperley, 2020). As a result, the Panama Canal Authority often restricts the ships that pass through the waterways’ locks. Consequently, trade reduces during such times, ultimately reducing the economic significance of the transport system. Navigation in cold weather climates is also often a concern for waterway users (Timperley, 2020). Apart from the occasional difficulties faced by the users of the Canal during the cold weather seasons or the El Nino temperatures, the Panama Canal is facing a new threat from climate change (Timperley, 2020). The rise in world temperatures due to the greenhouse effect has increased water evaporation in the reservoirs that supply water to the Canal. This has correspondingly reduced the water level at the Canal, which has seen the Authority put restrictions on the number of cargo ships that can carry through the water channel (Timperley, 2020). If the situation continues and the climate issue is not handled soon, the waterway will be useless.

Conclusion

In summary, the Panama Canal has impacted transportation and furthered the development of trade globally since its creation. The United States was able to do between 1904 and 1914 was solve a transport problem that was costing the world a lot of revenue by using the limited resources that were there and innovating on those that were not. The project creation made it possible for goods to be transported from the furthest parts of Asia to America’s East Coast. The ships evaded an entire 13,000 miles trip to South America before getting to the American coastline. Transportation in the 1900s was truly transformed by this magnificent invention. The Panama Canal has enabled the transportation and trade of crude oil, grains, iron ore, coal, among other products that would have otherwise been impossible to trade.

The reliable lock systems that elevate and de-elevate ships to grant them access to Gatun Lake make all this possible. The recent expansion of the system ensured its continuous relevance in the history of transportation. Since the modern ships being manufactured were wider and went deeper into the waters, it became necessary for the system to expand its lanes to accommodate the new Panamax ships. With time, similar innovations are being made to support the waterway in Panama. Waterways such as the Suez Canal and the yet-to-be-finished Nicaragua Canal are created to alleviate the vessel traffic that often foreshadows the legendary water channel. Despite facing competition from these upcoming channels, Panama Canal will remain the leading, quickest, and most affordable transportation trade route for many years to come.

References

History. (2019). Panama Canal. History. Web.

Miller, K., & Hyodo, T. (2021). Impact of the Panama Canal expansion on Latin American and Caribbean ports: difference in difference (DID) method.Journal of Shipping and Trade, 6(1). Web.

Notteboom, T., Pallis, A., & Rodrigue, J. (2021). Port Economics, Management and Policy. Web.

Office of the Historian. (2022). Milestones: 1899–1913 – Office of the Historian. History.state.gov. Web.

Sabonge, R. (2017). The Panama Canal expansion: A driver of change for global trade flows (pp. 7-21). Santiago: United Nations.

Timperley, J. (2020). The Panama Canal is running out of water. Wired UK. Web.

Wang, M. (2017). The role of Panama Canal in global shipping.Maritime Business Review, 2(3), 247-260. Web.

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