Withing the usual cacophony on world monetray and macro matters, it is changes like these which are expected to reshape the world economy.
Canals played a major role in world trading and there has been huge politics around their construction. Panama Canal was also one such canal which overnight allowed ships to move from Atlantic Ocean to Pacific Ocean by crossing the canal instead of rounding the South American continent coastline.
The Panama Canal is being revamped now and is being widened. It will now be able to take wider ships across Pacific:
A century after transforming global markets, the Panama Canal is about to redraw world trade once again. Nine years of construction work, at a cost of more than $5 billion, have equipped the canal with a third set of locks and deeper navigation channels, crucial improvements that will double the isthmus’s capacity for carrying cargo between the Atlantic and Pacific oceans.
When the new locks slide open to receive traffic for the first time in late June, the reverberations will be felt from Asian gas terminals to Great Plains farms and ports from Miami to Long Beach to Santiago.
The debut coincides, fortuitously, with a surge in U.S. natural-gas production that has shale outfits suddenly seeking out new export markets. The deeper channels will be able to accommodate the kind of massive tankers that transport liquefied natural gas, shaving eleven days and a third of the cost off the typical round trip to the Far East. Markets from Chile to China will also become more accessible for oil drillers across the Americas while millions of tons of container shipments originating from Asia could start bypassing western U.S. ports and opt to dock instead along the Gulf Coast or Eastern seaboard.
When it opened for business, the canal was an engineering marvel.
In the 34-year span that began with France’s failed attempt and ended with the U.S. completion in 1914, some 75,000 workers toiled to carve out the 50-mile long (80 kilometer) channel. In the process, they created an artificial body of water, Gatun Lake, and an earthen dam that at the time were the world’s largest. They also opened up the mammoth Culebra Cut, a ditch through the Continental Divide that required the removal of about 100 million cubic yards of rock and shale. By the time work was complete, some 25,000 people were dead, many succumbing to yellow fever, malaria and other tropical diseases, according to the Panama Canal Authority.
The latest construction has come with less tragedy but its own share of cost overruns and engineering snafus. Leaky locks were one major problem, helping delay the project by two years. Those locks — a set of chambers sealed by 3,200-ton doors that raise and lower water levels — provide access to a wider lane for vessels: 180 feet across, compared with 109 feet in the original locks. (Many cargo ships squeeze through nowadays with just a couple feet of clearance on each side.) In the middle of the isthmus, the canal authority has also dredged deeper, wider lanes through Gatun Lake, where ships spend much of the inter-oceanic voyage.
For gas and crude oil companies reeling from the recent collapse in prices, the drop in time and shipping costs will provide a much-needed lift. Corn, soybean and wheat growers in the U.S. also stand to benefit, along with importers like Dole Food Co. Inc. and Chiquita Brands International Inc.
“We can send gas ships that couldn’t fit through the canal before,” said Bill Diehl, president of the Greater Houston Port Bureau, a maritime industry trade group. “Asia looks like a good market for us now. The shipping costs look like a fair fight.”
Great to know all this.
The surge of world economy started when we figured better ways to do trading across Ocean waters…