The Panama Canal

Often referred to as the “eighth wonder of the world” and one of civil engineering’s greatest triumphs in the 20^th century, the Panama Canal (Canal de Panamá) offers the shortest route (an approximate 80 kilometers/50 miles) linking the Pacific and Caribbean coasts of Panama.  Its impact on Panama’s economy is undeniable, but its global significance is nothing less than miraculous.  Following an incredible price tag of 27,500 lives and $352 million, the United States proudly declared on August 15, 1914, that the canal was officially open for business.

Since that iconic day, ships no longer have had to go through the enormous task of sailing 19,000 kilometers through Cape Horn (at the southern most tip of South America), in order to transport goods from the Atlantic to the Pacific coast.  More than 14,000 vessels passed through the canal in 2005, with a total capacity of 278.8 million tons, making it an average of almost 40 vessels per day.  According to Forbes.com, the Panama Canal handles over 5% of all world cargo traffic.  Pretty impressive for a canal that is less than a century old.

As noted by Norman J. Padelford “Traffic through the Panama Canal is a barometer of world trade, rising in times of world economic prosperity and declining in times of recession.  The canal carries more freight than ever because the average size of vessels has increased.”  He continues to say that “The principal trade routes served by the Panama Canal run between the following points: the east coast of the U.S. mainland and Hawaii and East Asia; the U.S. east coast and the west coast of South America; Europe and the west coast of North America; Europe and the west coast of South America; the east coast of North America and Oceania; the U.S. east and west coasts; and Europe and Australia.  Trade between the east coast of the United States and East Asia dominates international canal traffic.  Among the principal commodity groups carried through the canal are motor vehicles, petroleum products, grains, and coal.”

On October 22, 2006, an approximate 77% of Panamanian voters approved the expansion of the canal during a nation wide referendum.  This USD$5.25 billion project is aimed at doubling the capacity of the canal and attracting an incredible 40,000 jobs during the estimated timeline of seven to eight years.

© Copyright 2006 Cpanama Real Estate Corp.