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Panama Canal Turns 100 Amid Growing Pains, Competition

Panama Canal Turns 100 Amid Growing Pains, Competitioni
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Mil Arcega
August 13, 2014 11:23 PM
The Panama Canal turns 100 this week. Officially opened in 1914, the 77-kilometer channel joins the Atlantic and Pacific Ocean at the isthmus of Panama. It made the world smaller, creating a shortcut for cargo ships that ply their trade from east and west. But 100 years later the canal is straining from the demands of expanding global trade. And as Mil Arcega reports, it may also be facing some serious competition as it navigates the next 100 years.

The Panama Canal turns 100 this week. Officially opened in 1914, the 77-kilometer channel joins the Atlantic and Pacific Ocean at the isthmus of Panama.  It made the world smaller, creating a shortcut for cargo ships that ply their trade from east and west.  But 100 years later the canal is straining from the demands of expanding global trade.  It may also be facing some serious competition as it navigates the next 100 years.

Taking over 30 years to build, tens of thousands of workers - and more than 27 million kilograms of dynamite - it is considered one of the biggest engineering feats of the 20th century.  

"The Panama Canal is one of those phenomenal moments in history.  A terrific example of engineering and technological strength of the United States, and really the coming of age of the United States as a global power," said University of Maryland Professor Julie Greene, author of the book "Canal Builders."

But the work exacted a heavy toll.  By the time the first ship crossed the canal, nearly 26,000 workers had died, some from accidents, many from malaria.

But it also changed international commerce forever, especially in the U.S., says George Washington University professor, Noel Maurer.

“Because it enabled for the first time oil from California and lumber from the Pacific Northwest, but it was really the Californian oil that was driving the boat, to be profitably exported from California to the rest of the United States, and that had huge economic benefits for the United States," Maurer said.

Today more than four percent of the world's commerce passes through the canal - some 14,000 ships per year. But the canal's locks are now too small for much of the world's container fleet and the largest oil tankers.

Transportation expert Rodney McFadden says bigger ships can be more efficient and profitable.
 
“They carry more cargo for about the same amount of money per mile.  They are much easier on the environment," he said. "And they increase trade."

A Hong Kong company is backing a $40 billion plan to dig an alternate route through Nicaragua.  If successful, it could pose a serious challenge to the canal.  

But critics say the project is redundant and impractical, especially when the Panama canal is in the midst of a $5 billion expansion.  Once complete, the new locks will accomodate ships the length of the Empire State building and as wide as three basketball courts.

Autodesk, the San Francisco - based company that created the software for the project, is thrilled.  Not only has the expansion created over 250,000 jobs - once finished - it will create thousands more around the world, says Autodesk spokesman Paul Sullivan.

"The ripple effect here is interesting because once this canal is completed and these ships are able to transit the canal,  you’re going to see a lot  more cities around the world competing for improving their ports so they can support those larger ships," he said.

Of the approximately 160 ports in the U.S., only about 15 can accommodate the larger supertankers that will pass through the expanded canal.  By early 2016, experts say this grand canal will be able to handle 97 percent of the world's container ships - doubling the canal's capacity and ensuring it remains a marvel of engineering a hundred years from now.

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