Travel
Panama remakes its famous canal for giant ships
(Agencies)
Updated: 2009-11-18 10:14
"The expanded canal gives us a lot of options we don't have today," said Peter Gyde, president of A.P. Moller-Maersk Group's Caribbean Sea Cluster at Maersk Line, which moves containers by rail across Panama because much of its shipping fleet outgrew the canal years ago.
Energy-hungry Asian countries will find it cheaper to buy oil from traditional U.S. suppliers such as Venezuela as shipping costs come down and the amount of crude stored in the Caribbean will likely increase as improved logistics allow traders to take advantage of more arbitrage opportunities.
FAILED FRENCH ATTEMPT
Crossing the isthmus by boat was a dream from the early years of the Spanish conquest of the Americas but it wasn't until 1881 that a French team led by Ferdinand de Lesseps, the famed builder of the Suez Canal, launched an ill-fated attempt to cut a sea-level canal through Panama.
The effort was a failure and an estimated 22,000 lives were lost to malaria, yellow fever and accidents.
The United States finished the project 33 years and another 5,600 lives later, helped by improved excavation technology and the discovery that malaria and yellow fever are transmitted by mosquitoes.
The completed canal cemented U.S. hegemony in the Americas and forever altered global trade.
"The creation of a water passage across Panama was one of the supreme human achievements of all time," wrote U.S. historian David McCullough in his 1977 book, "The Path Between the Seas."
While the canal expansion will boost trade, shipping companies are concerned that it could be financed by increasing tolls, which are already seen as high.
"The one thing that concerns the users of the canal today is that the canal has gotten excessively expensive in the last few years," said Maersk's Gyde.
He said at least one shipper recently saved money by rerouting ships returning to Asia around South America, a trip that adds as much as 8,000 miles, in part because of the high tolls. "That's how extreme the carriers are willing to look at this."
