The shipping industry is booming these days, as are the canals through which much oceanic shipping passes. Expansions of old canals and proposals for new ones are making waves in the shipping industry, and the next few years should see significant developments take place.
The Panama Canal recently celebrated its 100th anniversary and will unveil a third set of locks in 2015, expanding its capacity. The expansion is expected to overrun its initial US$5.25 billion cost estimate and is behind schedule—mired in legal and financial issues between Panama and the construction consortium undertaking the project—but completion is within sight.
The Egyptian government announced an upgrade to the 145-year-old Suez Canal on the same day that Panama’s celebrated its 100th anniversary. It will be the first upgrade since the Suez Canal’s construction. The announcement, whether its timing was a coincidence or not, could be seen as either a friendly nod or a competitive nudge to the Panama Canal.
Furthermore, a wealthy Chinese businessman has already dumped US$100 million from his fortune into what is an ambitious (to say the least) US$40 billion project to build a canal in Nicaragua.
And now, state-owned China Harbour Engineering Company is showing interest in further expansion of Panama’s canal. The Panama Canal Authority’s website states that a CHEC delegation, accompanied by a Chinese government official, met with the Panama Canal Administrator. CHEC Chairman Mo Wenhe stated, “We are exploring our participation in all canal projects, especially in the design, construction, and financing of a fourth set of locks.”
With the increase in the quantity of goods being shipped in today’s interconnected, globalized world, these canal expansions will be as important as ever.