Happy 100th Birthday to The Panama Canal!

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The Panama CanalI spent much of my childhood sailing, and even lived on a sailboat for years. Most sailors dream of the big milestones: crossing the equater, crossing the horns, and cruising through The Panama Canal.

Many businesses rely on that soon-to-be 100 year old structure for delivery of their goods from Pacific to Atlantic and back. All of us as consumers would be amazed how may of our day to day products have seen that passage before they reached our hands.

The Panama Canal

I’ll be honest, when I hear “Panama” I start singing Van Halen. That said, The Panama Canal has had a much longer history. My favorite resource is the Stuff You Should Know podcast here, but I will try to be a bit more brief.

Conceived in 1580, started by the French between 1881 to 1894, taken over by the US in 1904 under President Theodore Roosevelt, and finally completed in 1914. Just the production was a feat of human will and intelligence, and an amazing story of hardship.

The Panama Canal brings ships up a mountain through a series of locks to Gatun Lake, then back down the locks to the other side. Saving days of travel down around South America and the perilous Cape Horn.

The Panama Canal Expansion

The expansion is to add more channels and locks that would be extend the canal’s throughput, and using new technology, be able to re-use large amounts of the water which would take less impact on the current irrigation.

As part of the $5.25 billion expansion project, wider locks with mechanical gates will reduce congestion and be able accommodate post-Panamex vessels, which are as long as three football fields and have the capacity to carry about 2.5 times the number of containers than held by ships currently using the canal.

Also, as a separate feat, a rival lock in Nicaragua is expected to start this year and being built by an organization out of Hong Kong.

How does this relate?

For those of us with product-based businesses, shipping and receiving product is always a major concern. Moving product between continents is a huge challenge and transportation costs are a large factor.

Another thing to consider is will more opportunities and less waiting time lead to reduced shipping costs and faster delivery? Will you be able to bring product to your customer faster and cheaper next year?

Do you currently have product shipping through the Panama Canal? How do you see this affecting your supply chain?

Src: S&DC

Justin Velthoen

Justin Velthoen

Justin Velthoen has 20 years of supply chain experience, from food distribution to manufacturing, to systems management and implementation. His primary focus is helping businesses realize the cost savings directly to their bottom line.

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