(CN) – The new, expanded locks at the Panama Canal are fully operational and ready to receive their first ships, the consortium that built them announced Wednesday.
The $5.25 billion expansion of the Panama Canal has long been seen as a game changer in the movement of containerized cargo around the globe and particularly here in the United States.
Ports up and down and East and Gulf coasts have spent hundreds of millions of dollars to prepare for what they hope will be a significant jump in cargo.
Improvements have ranged from the construction of all new port terminals one such project is currently well underway in Charleston, S.C. at the site of the former Charleston Naval Base to the creation of better connectivity between terminals and the railroads that serve port communities.
The Panama Canal Authority has longstanding service agreements with at least 12 ports serving markets in the population-rich eastern U.S., including the Ports of Houston, New Orleans, Tampa, and Manatee on the Gulf Coast, and the Ports of New York/New Jersey, Virginia, Georgia, South Carolina, Maryland, Philadelphia, Miami, and Everglades along the East Coast.
Under the terms of the agreements, some of which date back to 2003, and are renewable every two years, the authority and its partner ports will undertake joint marketing activities to promote the all-water route through the canal, and exchange market data, studies, and information on modernization efforts undertaken to improve customer service.
Currently, about 64 percent of the cargo that transits the canal has an origin or destination in the U.S. The Panama Canal expansion program created a new lane of traffic through the construction of a new set of locks, which will double its capacity.
The expanded canal will increase cargo volumes along the East and Gulf Coasts by allowing both more traffic and much larger vessels what the cargo industry calls “Post-Panamax” ships to pass through.
The restriction of the “old” Panama Canal limited vessels along the Asia-East Coast trade lane to 5,000 TEUs. With the expansion, ships as large as 12,000 TEUs will be able to transit the canal.
A single TEU is equivalent to one 20-foot cargo container.
Industry estimates suggest that since the canal project got under way, more than 1,000 additional ships have to join the world’s container-carrying fleet and over 80 percent of this new vessel capacity is in the 8,000 to 14,000-TEU category.
The new locks were originally expected to be operational in October 2014. They are now scheduled to formally go into service on June 26.
Grupo Unidos por el Canal SA said in a statement that the locks were “brought to full operability” Tuesday and the system “works to perfection.”
The consortium is led by the Italian company Salini Impregilo and also comprises Spain’s Sacyr Vallehermoso, Belgium’s Jan De Nul and Panama’s Constructora Urbana SA.
The Associated Press contributed to this report.
FILE – In this May 11, 2016 file photo, ships transit through the Panama Canal near Panama City. (AP Photo/Arnulfo Franco, File)
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