The shortest path between two points is a straight line. It just so happens that this line is 50 miles long, accounts for nearly 300 tons of shipments worldwide annually; and the two points are the Atlantic and Pacific Oceans. Since the colonization and exploration of the Americas, a shortcut has been envisioned to connect the West with the East across the Isthmus of Panama. This simple solution has been the root of an ongoing engineering idea that has transformed this section of land into a gateway for international trade routes. The current expansion plans underway will further cement the Panama Canal as a nucleus for shipping and impact most economies across the globe.
In the late 1800s, the French began to build a sea-level canal across Panama, but could not finish the project due to insufficient capital, difficult working conditions and a design that did not take into account the lower sea level on the Atlantic side of Panama than on the Pacific side. In 1904, the United States bought the Canal Zone from Panama. Over a 10 year span, the U.S. Army Corps of Engineers constructed this “path between the seas,” battling the natural challenges of the geography that had stalled others, including feats requiring the excavation and disposal of millions of cubic yards of dirt and rock. In 1914, the Panama Canal was completed at a cost of $375 million. What emerged was an engineering masterpiece that featured the then “world’s largest locks” and changed the landscape of global trade routes forever. The United States ran Canal operations for 85 years, until December 31, 1999, when the Panama Canal Authority assumed its operation.
EXPANSION CONSTRUCTION BEGINS
Expansion of the canal was first proposed in the 1930s to accommodate large United States warships, and excavation for larger locks began in 1939 but was stopped during World War II. The current expansion project was approved in a national referendum in 2006, and the program broke ground one year later in 2007. The $5.25 billion project, scheduled for completion in 2014 in time for the 100th anniversary of the original canal completion, will allow for much larger container ships and other cargo vessels to easily reach East coast ports in the U.S., and most agree that the Panama Canal will gain a competitive edge over the current U.S. Intermodal System and the Suez Canal routes. While the Panama Canal acts as the gatekeeper for cargo goods shipped worldwide, the impact of the expansion will probably be felt most in the United States, the destination or origin of about two-thirds of the goods that pass through the canal.
THE THIRD SET OF LOCKS
Perhaps the largest and most technologically advanced component of the expansion project includes the design and construction of a new third set of locks. Currently, the Canal Zone features locks that can handle ships up to 965 feet long and 106 feet wide, a common container ship size referred to as ‘Panamax.’ The canal operates at or near its capacity of about 35 ships a day, with more demand often waiting at bay or having to choose costlier alternative routes. Currently, only ships carrying up to a maximum of 4,400 TEUs (twenty-foot equivalent units, a standard of measurement) are able to pass through the existing two sets of locks.
The new third set of locks will help eliminate some of those backlogs and inefficiencies by increasing daily capacity with the hope of doubling the amount of goods that can pass through the Canal Zone each year.
More importantly, the locks will be able to handle “Post-Panamax” ships — 25 percent longer, 50 percent wider and, with a deeper draft as well, which can carry two or three times the cargo with a maximum of 12,600 TEUs. The demand for larger ships stems from the increase in shipping costs, notably oil. The larger “Post-Panamax” ships will be able to transit the new set of locks with greater volume of cargo, which mean lower shipping costs per TEU, and ultimately better economies of scale for both shippers and carriers.
The contract was awarded in 2009 to Grupo Unidos por el Canal, a consortium formed by companies Sacyr Vallehermoso, S.A. of Spain; Impregilo SpA of Italy; Jan de Nul n.v. of Belgium; and Constructora Urbana, S.A. of Panama. The contractor formally commenced the works on August 25 of the same year.
The project involves the construction of two mirror sets of locks, one on the Pacific and the other on the Atlantic. The new locks, which will account for about half the cost of the project at a total of $3.2 billion, will have three chambers each with water-saving basins, a lateral filling and emptying system and rolling gates. While the new locks will operate under the same principle as the original set of locks, they will use a different kind of gate at the end of each chamber, which should make maintenance easier and less disruptive.
These new locks will be approximately 40 percent longer and 60 percent wider than the original locks, supplemented by a system of water saving basins. Additionally, they are expected to utilize 7 percent less water per transit than the existing system, also allowing this water to be reused rather than flushed back out to sea. Moreover, the new reutilization basins are expected to capture and recycle 60 percent of the water from the locks as they are emptied, rather than lose it, and partially refill the locks for another ship to pass through. To build the new locks, the contractor installed its own industrial parks where the concrete that will shape the massive structures will be mixed. The rock dug out from the excavation area on the Pacific side, known as basalt, will be crushed and used as aggregate and sand for the mix. The designs for the third set of locks, as well as the fabrication of its different components, are being done in different parts of the world.
DREDGING AND EXCAVATION OF EXISTING AND NEW ROUTES
Another integral component to the expansion of the Canal Zone includes the removal and disposal of material along with a colossal dredging endeavor. Navigation channels from both the Atlantic and Pacific sides are being improved, with both entrances to the Canal being dredged, as well as Culebra Cut and Gatun Lake. Additionally, the project calls for the increase of Gatun Lake’s maximum operating level by nearly 45 cm to improve Canal water supply and draft dependability.
Construction of the new access channel to link the third set of locks, on the Pacific side, to Culebra Cut has been under construction since 2007. This project requires the excavation of nearly 50 million cubic meters of material. To date, more than half of this total has already been excavated by the different contractors.
Progress on these excavations can be clearly seen from the location of the former Paraiso Hill, the area where, nearly four years ago, the Canal Expansion Program was inaugurated. Originally 136 meters above lake level, the hill has been reduced to 27 meters above lake level and contractors are now preparing to further reduce it to about 9 meters.
The dredging component of the expansion is divided into the Pacific and Atlantic sides respectively. The Pacific contract was awarded in 2008 to Belgian company Dredging International. The project consists of the widening of the Panama Canal Pacific entrance navigational channel to a minimum 225 meters and deepening to 15.5 meters below mean low water level, as well as partial construction of the Pacific Post-Panamax locks south access. A total of 8.7 million cubic meters of material will be removed as part of this project. In January of this year, the D’Artagnan, one of the world’s most powerful cutter-suction dredges, joined Dredging International’s fleet.
The Atlantic contract was awarded to Belgian company Jan de Nul n.v. in 2009. The work includes dredging and dry excavation of approximately 17.9 million cubic meters of material. An area of approximately 13.8 kilometers is being dredged and the existing Atlantic entrance navigation channel is being widened from its current 198 meters to a minimum 225 meters, and the north access channel to the new locks on the Atlantic side is being widened to a minimum 218 meters.
The expansion project also entails the removal of some 30 million cubic meters of material to deepen and widen Gatun Lake navigational channels and deepen the navigational channel at Culebra Cut. The Canal workforce is responsible for conducting part of the work. The rest has been awarded to contractors as follows: Jan De Nul n.v. is in charge of dredging the new north entrance to the Pacific Access channel, and Dredging International will complete dredging of the northern reaches along the Gatun Lake navigational channel. The new cutter-suction dredge Quibian I arrived in Panamanian waters in early April to support dredging activities in the lake and Cut.
The final component of the expansion will be to increase Gatun Lake’s maximum operating level by 45 centimeters, from its current 26.7 meters to 27.1 meters. This will provide additional storage capacity for more than 200 million cubic meters of water in the lake – enough for three additional daily transits. The work calls for the modification of certain structures, including the hydraulic cylinders that open and close the gates at Pedro Miguel Locks and the Gatun Locks upper level and the gates at Gatun Dam, among others.
Four gates have already been extended, while two new ones were fabricated at the Canal industrial area. Two new caissons were procured to complement the operation and maintenance of the extended spillway gates. Parallel to the extension of the gates, Canal personnel are testing seal prototypes for the existing locks submersible hydraulic arms in Pedro Miguel and Gatun and designs for the necessary modifications to the corresponding gates are being prepared.
PESQUEROS: A LOCAL CONTRIBUTOR TO A GLOBAL GATEWAY
It may be too soon to tell what the full impact of the expanded Panama Canal will be once it is completed in 2014 but there are several companies involved in the day-to-day construction underway that can attest to its initial scope. Pesqueros, a Marine and Industrial supply company located in Panama City, Panama, has been a provider for the Panama Canal for over 10 years and has been in the market since 1982. Founder and General Manager José Ávila has grown his company to 100 employees and locations throughout Panama and Central America. Pesqueros is primarily known as a supplier of heavy-duty hardware and equipment for fishing and merchant vessels, container terminals, shipping ports, and infrastructure projects among others. Omar Díaz, the Commercial Director for the Pesqueros Group, and specifically with the Panama Canal expansion project, has more than 15 years of experience managing commercial departments in international companies such as Telefonica.
The Pesqueros Group provides the wire rope and rigging for the locomotive system used to guide ships through the locks, the dredging machines they use to maintain the canal route, and the tug boats used to guide the container ships through the canal and locks primarily. The Panama Canal maintains a current fleet of 24 tugboats, with plans to increase the total number of tugs to 46 by 2014, and nearly 100 locomotives, or ‘mules’ as they’re commonly known. The tugboats use Ultra-high-molecular-weight polyethylene (UHMWPE) synthetic ropes. According to Díaz, Pesqueros had tested many brands of rope with their 450,000 lbs. test bed made by Chant Engineering, but ultimately decided to use DSM Dyneema for its strength and reliability.
For the Expansion Project specifically, Pesqueros supplies wire rope, synthetic rope, wire rope slings, chain slings, synthetic slings, shackles, clips, hooks, master links, and test bed services among other materials. Additionally, their workshop facility has two wire rope press machines that stay busy with the heavy demands from this project and other daily operations. But work on the Canal expansion has not been without its challenges. According to Díaz, “hosting a unique project such as the Panama Canal expansion attracts many companies from around the world with different expertise, diverse human capital, [and] different working techniques. If you add up the unique magnitude of the project, we end up with many requests of products, sizes and situations we never had in the past. So, to produce and come up with inventory to supply these needs is a huge challenge.”
Sensing opportunities that exist currently for infrastructure development throughout surrounding areas in Latin America, the Pesqueros Group is also taking advantage of the economic climate. “Due to the current situation in Europe and the U.S.A., there is a lot of Private investments and infrastructure projects going on in Latin America” explains Díaz. Examples of regional projects in which Pesqueros supplies hardware or equipment include: Panama Ports (Hutchison Whampoa Limited Company), which is the main port terminal on the Panamanian Pacific side; Manzanillo International Terminal, which is the main port terminal on the Panamanian Caribbean side; Ports Quetzal and San Jose in Guatemala; Empresa Portuaria Nacional in Nicaragua; Instituto Costarricense de Electricidad, the primary public services provider in Costa Rica; EP PetroEcuador, the main oil exploitation company in Ecuador; and PDVSA (Petroleos de Venezuela S.A.), the primary oil exploitation company in Venezuela.
A GAMECHANGER IN THE GLOBAL ECONOMY
The Panama Canal is an efficient route, but it has reached its maximum capacity. These capacity challenges will be overcome by 2014, when the Panama Canal expansion project is finished. This will mean trade flows that are free of congestion, and goods delivered faster and at less cost. With nearly 95% of all good imported to the U.S. arriving via container ships, the Panama Canal expansion represents a looming impact that will have ripple effects across nearly every aspect of the global economy, particularly in the U.S. What remains to be seen is to what scale? It is unknown whether trade routes are likely to be reset or adjusted, or how other ports and logistical systems will have to adapt to this new phenomenon. But one thing is certain – while this may not be the biggest construction project, it is, more importantly, the one that has the largest impact globally. As part of its construction, the amount of growth and investment within the broader logistics universe will be exponential both locally in Panama and worldwide, impacting everything from shipping and rail line construction to warehousing and terminal development. And while this current expansion is sure to revolutionize global trade commerce once again, the construction itself also serves to highlight the ingenuity and capability that exists today to accomplish a project of this magnitude.
Information and Pictures for this article provided by the Panama Canal Authority (ACP) and The Pesqueros Group.
Article by E.H. Evans, from the recent September-October 2011 Issue of the Wire Rope Exchange.
About the Panama Canal Authority (ACP)
The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the ACP is based on its organic law and the regulations approved by its Board of Directors. For more information, please visit http://www.pancanal.com/. You can also follow on Twitter: http://twitter.com/thepanamacanal.
About the Pesqueros Group
Pesqueros S.A. is a leader in the Marine and Infrastructure Supply industry throughout Panama and Central America. They have supplied projects in Costa Rica, Nicaragua, El Salvador, Guatemala, Honduras, Colombia and Venezuela for more than 25 years. For more information, please visit http://www.pesqueros.com or contact via phone at (507) 224-5050.