The widened Panama Canal is expected to open next year, and Egypt officially opened its $4.1bn expanded Suez Canal on August 6. Compared with the nine years it has taken to expand the Panama Canal, the Suez Canal project was completed in a record 11 months. The Suez works were planned to take three years, but President Abdel Fattah el-Sisi ordered that the canal be dug faster in light of Egypt’s unstable economic situation.
The expansion adds 72 kilometres alongside the original 163-kilometre Suez Canal. Mr Sisi claims the project will bring extensive development of industrial sites, warehousing and distribution along the banks. The goal is to make Egypt the heart of world trade.
The biggest benefit, however, is that the canal now facilitates two-way traffic. Prior to the expansion, the original canal was too narrow for large ships to pass in opposite directions. Even so, the largest vessels now under construction, capable of carrying 18,000 TEUs (20-foot equivalent units), can only use the Suez when not fully loaded. This means a fully loaded ship the size of those ordered by shipping giant Maersk will not be able to use the expanded canal.
Those vessels certainly will not be able to navigate the Panama Canal. Even when its expansion is completed, the canal will be limited to ships hauling about 14,000 TEUs. However, it is expected to serve twice as many vessels.
Already the Panama Canal is attracting industrial and logistics parks on its Pacific side. One example is Panama Pacifico, a 1400-hectare project that claims to be the largest mixed-use development in the world. It has already attracted more than 200 users, eight of which are Fortune 500 companies and 16 Forbes Global 2000 companies. Among them are 3M, Dell, BASF and Caterpillar.
But with a limited number of seaports on the US Gulf and east coast able to accommodate ships too big for Panama, Drewry Maritime Research reports that an increasing number of carriers operating on the Asia-US east coast trade are switching to the Suez route.