The earliest mention of a canal across the Isthmus of Panama dates back to 1534 when Charles V, Holy Roman Emperor and King of Spain ordered a survey for a route through Panama that would ease the voyage for ships traveling to and from Spain and Peru, as well as give the Spanish a tactical military edge over the Portuguese. During his expedition of 1788–1793, Alessandro Malaspina demonstrated the feasibility of a canal and outlined plans for its construction. Given the strategic situation of Panama and its narrow isthmus separating two great oceans, other forms of trade links were attempted over the years. The ill-fated Darien scheme was an attempt launched by the Kingdom of Scotland in 1698 to set up an overland trade route, but was defeated by the generally inhospitable conditions, and abandoned in July of 1699. Finally, the Panama Railway was built across the isthmus, opening in 1855. This overland link became a vital piece of infrastructure, greatly facilitating trade and largely determining the later canal route.
Also in 1855, William Kennish, a Manx-born engineer in the employ of the United States government surveyed and issued a report on a route for a proposed Panama Canal. His report was published in a book titled ”The Practicality and Importance of a Ship Canal to Connect the Atlantic and Pacific Oceans..
French construction attempt
An all-water route between the oceans was still seen as the ideal solution, and the idea of a canal was enhanced by the success of the Suez Canal. The French, under Ferdinand de Lesseps, began construction on a sea-level canal (i.e., without locks) through what was then Colombia‘s province of Panama, on January 1, 1880. The French began work in a rush with insufficient prior study of the geology and hydrology of the region. In addition, disease, particularly malaria and yellow fever, sickened and killed vast numbers of employees, ranging from laborers to top directors of the French company. Public health measures were ineffective because the role of the mosquito as a disease vector was then unknown. These conditions made it impossible to maintain an experienced work force as fearful technical employees quickly returned to France. Even the hospitals contributed to the problem, unwittingly providing breeding places for mosquitoes inside the unscreened wards. Actual conditions were hushed-up in France to avoid recruitment problems. In 1893, after a great deal of work, the French scheme was abandoned due to disease and the sheer difficulty of building a sea-level canal, as well as lack of French field experience, such as downpours causing steel equipment to rust. The high toll from disease was one of the major factors in the failure; as many as 22,000 workers were estimated to have died during the main period of French construction (1881–1889).
At this time, various interests in the United States were also expressing interest in building a canal across the isthmus, with some favouring a route across Nicaragua (see Nicaragua Canal) and others advocating the purchase of the French interests in Panama. Eventually, in June 1902, the U.S. Senate voted in favor of pursuing the Panamanian option, provided the necessary rights could be obtained. (It is claimed that the vote was swayed by William Nelson Cromwell.)
On January 22, 1903, the Hay-Herran Treaty was signed by United States Secretary of State John M. Hay and Dr. Tomás Herrán of Colombia. It would have granted the United States a renewable lease in perpetuity from Colombia on the land proposed for the canal. This is often misinterpreted as the “99-year lease” due to misleading wording included in article 22 of the agreement that refers to property within the land but does not pertain to the control of the canal and the right for the United States to renew the lease indefinitely. It was ratified by the United States Senate on March 14, 1903, but the Senate of Colombia did not ratify the treaty. Philippe Bunau-Varilla, chief engineer of the French canal company, told Roosevelt and Hay of a possible revolt and hoped that the U.S. would support it with troops and money. President of the United States Theodore Roosevelt changed tactics, promising support for Panama’s intermittent separatist movement. On November 2, 1903 U.S. warships blocked sealanes for Colombian troops from coming to put down the revolt, while dense jungles blocked land routes. Panama achieved independence on November 3, 1903 when the United States sent naval forces to encourage Colombia‘s surrender of the region. The United States quickly recognized them. Also in November 6, 1903, Phillipe Bunau-Varilla, Panama’s ambassador to the United States, signed the Hay-Bunau Varilla Treaty, granting rights to the United States to build and indefinitely administer the Panama Canal. Although Bunau-Varilla was serving as Panama’s ambassador, he was a French citizen and was not authorized to sign treaties on behalf of Panama without Panamanian review. This treaty would later become a contentious diplomatic issue between the two countries.
The United States, under President Theodore Roosevelt, bought out the French equipment and excavations for US$40 million and began work on May 4, 1904. The United States paid Colombia $25,000,000 in 1921, seven years after completion of the canal, for redress of President Roosevelt’s role in the creation of Panama, and Colombia recognized Panama under the terms of the Thomson-Urrutia Treaty.
John Frank Stevens, Chief Engineer from 1905 to 1907, argued the case against a sea-level canal like the French had tried to build and convinced Theodore Roosevelt of the necessity of a canal built with dams and locks. Stevens’ primary achievement in Panama was in building the infrastructure necessary to complete the canal. He rebuilt the Panama Railway and devised a system for disposing of soil from the excavations by rail. He also built proper housing for canal workers and oversaw investment in extensive sanitation and mosquito-control programmes that eliminated disease from the area — particularly malaria and yellow fever, the vector of which had been identified as the mosquito by Cuban physician and scientist Dr. Carlos Finlay in 1881. Finlay’s theory and investigative work had recently been confirmed by Dr. Walter Reed while in Cuba with U.S. Army motivation during the Spanish-American War (see also Health measures during the construction of the Panama Canal).
With the diseases under control, and after significant work on preparing the infrastructure, construction of an elevated canal with locks began in earnest and was finally possible. The Americans also gradually replaced the old French equipment with machinery designed for a larger scale of work (such as the giant hydraulic crushers supplied by the Joshua Hendy Iron Works), to quicken the pace of construction. President Roosevelt had the former French machinery minted into medals for all workers who spent at least two years on the construction to commemorate their contribution to the building of the canal. These medals featured Roosevelt’s likeness on the front, the name of the recipient on one side, and the worker’s years of service, as well as a picture of the Culebra Cut on the back.
In 1907 Roosevelt appointed George Washington Goethals as Chief Engineer of the Panama Canal. The building of the canal was completed in 1914, two years ahead of the target date of June 1, 1916. The canal was formally opened on August 15, 1914 with the passage of the cargo ship SS Ancon. Coincidentally, this was also the same month that fighting in World War I (the Great War) began in Europe. The advances in hygiene resulted in a relatively low death toll during the American construction; still, 5,609 workers died during this period (1904–1914). This brought the total death toll for the construction of the canal to around 27,500.
By the 1930s it was seen that water supply would be an issue for the canal; this prompted the building of the Madden Dam across the Chagres River above Gatun Lake. The dam, completed in 1935, created Madden Lake (later Alajuela Lake), which acts as additional water storage for the canal. In 1939, construction began on a further major improvement: a new set of locks for the canal, large enough to carry the larger warships which the United States was building at the time and had planned to continue building. The work proceeded for several years, and significant excavation was carried out on the new approach channels, but the project was canceled after World War II.
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After the war, U.S. control of the canal and the Canal Zone surrounding it became contentious as relations between Panama and the U.S. became increasingly tense. Many Panamanians felt that the Canal Zone rightfully belonged to Panama; student protests were met by the fencing in of the zone and an increased military presence. The unrest culminated in riots in which approximately 20 Panamanians and 3-5 U.S. soldiers were killed on Martyr’s Day, January 9, 1964. Negotiations toward a new settlement began in 1974, and resulted in the Torrijos-Carter Treaties. Signed by President of the United States Jimmy Carter and Omar Torrijos of Panama on September 7, 1977, this mobilized the process of granting the Panamanians free control of the Canal so long as Panama signed a treaty guaranteeing the permanent neutrality of the Canal. The treaty led to full Panamanian control effective at noon on December 31, 1999, and the Panama Canal Authority (ACP) assumed command of the waterway.
Before this handover, the government of Panama held an international bid to negotiate a 25-year contract for operation of the container shipping ports located at the Canal’s Atlantic and Pacific outlets. The contract was not affiliated with the ACP or Panama Canal operations and was won by the firm Hutchison Whampoa, a Hong Kong-based shipping concern whose owner is Li Ka Shing.
The canal consists of artificial lakes, several improved and artificial channels, and three sets of locks. An additional artificial lake, Alajuela Lake (known during the American era as Madden Lake), acts as a reservoir for the canal. The layout of the canal as seen by a ship passing from the Pacific end to the Atlantic is as follows:
- From the buoyed entrance channel in the Gulf of Panama (Pacific side), ships travel 13.2 km (8.2 mi) up the channel to the Miraflores locks, passing under the Bridge of the Americas.
- The two-stage Miraflores lock system, including the approach wall, is 1.7 km (1.1 mi) long, with a total lift of 16.5 meters (54 ft) at mid-tide.
- The artificial Miraflores Lake is the next stage, 1.7 km (1.0 mi) long, and 16.5 meters (54 ft) above sea level.
- The single-stage Pedro Miguel lock, which is 1.4 km (0.8 mi) long, is the last part of the ascent with a lift of 9.5 meters (31 ft) up to the main level of the canal.
- The Gaillard (Culebra) Cut slices 12.6 km (7.8 mi) through the continental divide at an altitude of 26 meters (85 ft), and passes under the Centennial Bridge.
- The Chagres River (el Río Chagres), a natural waterway enhanced by the damming of Lake Gatún, runs west about 8.5 km (5.3 mi), merging into Lake Gatun.
- Gatun Lake, an artificial lake formed by the building of the Gatun Dam, carries vessels 24.2 km (15.0 mi) across the isthmus.
- The Gatún locks, a three-stage flight of locks 1.9 km (1.2 mi) long, drop ships back down to sea level.
- A 3.2 km (2.0 mi) channel forms the approach to the locks from the Atlantic side
- Limón Bay (Bahía Limón), a huge natural harbour, provides an anchorage for some ships awaiting passage, and runs 8.7 km (5.4 mi) to the outer breakwater.
Thus, the total length of the canal is 50 mi (80 km).
Initially the locks at Gatun had been designed as 28.5 meters (94 ft) wide. In 1908 the United States Navy requested that the locks should be increased to have a width of at least 36 meters (118 ft) which would allow the passage of US naval ships. Eventually a compromise was made and the locks were to be constructed to a width of 33.53 meters (110.0 ft). Each lock is 320 meters (1,050 ft) long with the walls ranging in thickness from 15 meters (49 ft) at the base to 3 meters (9.8 ft) at the top. The central wall between the parallel locks at Gatun has a thickness of 18 meters (59 ft) and stands in excess of 24 meters (79 ft) in height. The lock gates are made from steel and measure an average of 2 meters (6.6 ft) thick, 19.5 meters (64 ft) in width and 20 meters (66 ft) in height. It is the size of the locks, specifically the Pedro Miguel Locks, along with the height of the Bridge of the Americas at Balboa, that determine the Panamax metric and limit the size of ships that may use the Canal.
Tolls for the canal are decided by the Panama Canal Authority and are based on vessel type, size, and the type of cargo carried.
For container ships, the toll is assessed per the ship’s capacity expressed in twenty-foot equivalent units or TEUs. One TEU is the size of a container measuring 20 feet (6.1 m) by 8 feet (2.44 m) by 8.5 feet (2.6 m). Effective May 1, 2009, this toll is US$72.00 per TEU. A Panamax container ship may carry up to 4,400 TEU. The toll is calculated differently for passenger ships and for container ships carrying no cargo (“in ballast”). As of May 1, 2009 the ballast rate is US$57.60 per TEU.
Passenger vessels in excess of 30,000 tons (PC/UMS), known popularly as “cruise ships”, pay a rate based on the number of “berths”, that is, the number of passengers that can be accommodated in permanent beds. The per berth charge is currently $92 for unoccupied berths and $115 for occupied berths. Started in 2007, this has greatly increased tolls for such vessels. Passenger vessels of less than 30,000 tons or with less than 33 tons per passenger are charged on the same “per ton” schedule as freighters.
Most other types of vessel pay a toll per PC/UMS net ton, in which one “ton” is actually a volume of 100 cubic feet (2.83 m3). (The calculation of tonnage for commercial vessels is quite complex.) As of fiscal year 2008, this toll is US$3.90 per ton for the first 10,000 tons, US$3.19 per ton for the next 10,000 tons, and US$3.82 per ton for the next 10,000 tons, and US$3.76 per ton thereafter. As with container ships, a reduced toll is charged for freight ships “in ballast”.
Small vessels up to 583 PC/UMS net tons when carrying passengers or cargo, or up to 735 PC/UMS net tons when in ballast, or up to 1,048 fully loaded displacement tons, shall be assessed minimum tolls based upon their length overall, according to the following table:
|Length of vessel||Toll|
|Up to 15.240 meters (50 ft)||US$1,300|
|More than 15.240 meters (50 ft) up to 24.384 meters (80 ft)||US$1,400|
|More than 24.384 meters (80 ft) up to 30.480 meters (100 ft)||US$1,500|
|More than 30.480 meters (100 ft)||US$2,400|
The most expensive regular toll for canal passage to date was charged on May 16, 2008 to the Disney Magic, which paid US$331,200. The least expensive toll was 36 cents to American adventurer Richard Halliburton who swam the canal in 1928. The average toll is around US$54,000. The highest fee for priority passage charged through the Transit Slot Auction System was US$220,300, paid on August 24, 2006 by the Panamax tanker Erikoussa, bypassing a 90-ship queue waiting for the end of maintenance works on the Gatun locks, thus avoiding a 7-day delay. The normal fee would have been just US$13,430.
Ninety-five years since its opening, the canal continues to enjoy great success. Even though world shipping — and the size of ships themselves — has changed markedly since the canal was designed, it continues to be a vital link in world trade, carrying more cargo than ever before, with fewer overhead costs. Nevertheless, the canal faces a number of potential problems.
Efficiency and maintenance
There were fears that efficiency and maintenance would suffer following the U.S. withdrawal; however, this does not appear to be the case. Capitalizing on practices developed during the American administration, canal operations are improving under Panamanian control. Canal Waters Time (CWT), the average time it takes a vessel to navigate the canal, including waiting time, is a key measure of efficiency; according to the ACP, CWT is decreasing.
The accident rate during the fourth quarter of fiscal year 2008 was 0.29 accidents per 1000 transits, down 66.9 percent from 0.89 accidents per 1,000 transits during the same quarter the year prior. An official accident is one in which a formal investigation is requested and conducted.
Increasing volumes of imports from Asia which previously landed on the U.S. west coast ports are now passing through the canal to the American east coast. The total number of oceangoing transits increased to 3,157 in the fourth quarter of fiscal year 2008 from 3,147 transits year-over-year (the Canal’s fiscal year runs from October to September). This has been coupled with a steady rise in average ship size and in the numbers of Panamax vessels passing, so that the total tonnage carried has risen steadily from 227.9 million PC/UMS tons in fiscal year 1999 to 309.6 million tons in 2008. The Canal set a traffic record in fiscal year 2007 when 312 million tons transited the waterway. Despite the reduction in total transits due to the negative impact of vessel size, e.g., the inability of large vessels to cross in the Gaillard Cut), this represents significant overall growth in canal capacity.
The Panama Canal Authority (ACP) has invested nearly US$1 billion in widening and modernising the canal, with the aim of increasing capacity by 20 percent. The ACP cites a number of major improvements: included among them are the widening and straightening of the Gaillard Cut to reduce restrictions on crossing vessels; the deepening of the navigational channel in Gatun Lake to reduce draft restrictions and improve water supply; and the deepening of the Atlantic and Pacific entrances of the canal. This is supported by new equipment, such as a new drill barge and suction dredger, and an increase of the tug boat fleet by 20 percent. In addition, improvements have been made to the operating machinery of the canal, including an increased and improved tug locomotive fleet, the replacement of more than 16 km of locomotive track, and new lock machinery controls. Improvements have been made to the traffic management system to allow more efficient control over ships in the canal.
The withdrawal of the U.S. has allowed Panama to sell excess electricity produced by the canal’s dams, which was previously prohibited by the U.S. government. Only 25 percent of the hydroelectric power produced in the canal system is required to run the canal
The canal is presently handling more vessel traffic than had ever been envisioned by its builders. In 1934 it was estimated that the maximum capacity of the canal would be around 80 million tons per year; as noted above, canal traffic in 2008 consisted of 309.6 million tons of shipping.
Despite the gains which have been made in efficiency, the canal is soon expected to approach its maximum capacity. An additional complication is that the proportion of large (close to Panamax-sized) ships transiting the canal is increasing steadily; this may result in a further reduction in the number of transits, even if cargo tonnage rises. In any case, if the canal is to continue to serve the needs of global shipping, action will be required to increase its capacity.
Despite having enjoyed a privileged position for many years, the canal is increasingly facing competition from other quarters. Because Canal tolls are expected to rise, some critics have suggested that the Suez Canal may become a viable alternative for cargo en route from Asia to the U.S. east coast. The Panama Canal, however, continues to service more than 144 of the world’s trade routes and the majority of Canal traffic comes from the “All-Water Route” (the route from Asia to the U.S. East and Gulf Coasts via the Panama Canal).
The increasing rate of melting of ice in the Arctic Ocean has led to speculation that the Northwest Passage or Arctic Bridge may become viable for commercial shipping at some point in the future. This route would save 9,300 km (5,800 mi) on the route from Asia to Europe compared with the Panama Canal, possibly leading to a diversion of some traffic to that route. However, such a route is beset by unresolved territorial issues and would still hold significant problems due to ice.
As rain water flows into Gatun Lake at a faster rate, the lake accumulates excess water during wet months and consequently loses a total of 101,000 m3 (26,681,377 US gal; 22,216,894 imp gal) (52 million U.S. gallons) of fresh water to the ocean each time a ship transits the canal. Thus, during the dry season, when there is less rainfall, there is also a shortfall of water in Gatun Lake.
As a signatory to the United Nations Global Compact and a member of the World Business Council for Sustainable Development, the ACP has developed an environmentally and socially sustainable program for expansion, which will protect the aquatic and terrestrial resources of the Canal Watershed. After completion, expansion will guarantee the availability and quality of water resources by using unique water-saving basins at each new lock. These water-saving basins will diminish water loss and preserve freshwater resources along the waterway by reutilizing water from the basins into the locks. Each lock chamber will have three water-saving basins, which will reuse 60 percent of the water in each transit. There are a total of nine basins for each of the two lock complexes, and a total of 18 basins for the entire project.
The Pacific side sea level is about 20 centimeters (8 inches) higher than that of the Atlantic side due to differences in ocean conditions such as water densities and weather conditions.
As demand is rising, the canal is positioned to be a significant feature of world shipping for the foreseeable future. However, changes in shipping patterns — particularly the increasing numbers of post-Panamax ships — will necessitate changes to the canal if it is to retain a significant market share. It is anticipated that by 2011, 37% of the world’s container ships will be too large for the present canal, and hence a failure to expand would result in a significant loss of market share. The maximum sustainable capacity of the present canal, given some relatively minor improvement work is estimated at between 330 and 340 million PC/UMS tons per year; it is anticipated that this capacity will be reached between 2009 and 2012. Close to 50% of transiting vessels are already using the full width of the locks.
An enlargement scheme similar to the 1939 Third Lock Scheme, to allow for a greater number of transits and the ability to handle larger ships, has been under consideration for some time and has been approved by the government of Panama. This proposal to expand the Canal was approved in a national referendum by approximately 80% on October 22, 2006.
Third set of locks project
The current plan is for two new flights of locks to be built parallel to, and operated in addition to, the old locks: one to the east of the existing Gatún locks, and one south west of Miraflores locks, each supported by approach channels. Each flight will ascend from ocean level direct to the Gatún Lake level; the existing two-stage ascent at Miraflores / Pedro Miguel will not be replicated. The new lock chambers will feature sliding gates, doubled for safety, and will be 427 meters (1,400 ft) long, 55 meters (180 ft) wide, and 18.3 meters (60 ft) deep; this will allow the transit of vessels with a beam of up to 49 meters (160 ft), an overall length of up to 366 meters (1,200 ft) and a draft of up to 15 meters (50 ft), equivalent to a container ship carrying around 12,000 20-foot (6.1 m) long containers (TEU).
The new locks will be supported by new approach channels, including a 6.2 km (3.8 mi) channel at Miraflores from the locks to the Gaillard Cut, skirting around Miraflores Lake. Each of these channels will be 218 meters (715 ft) wide, which will require post-Panamax vessels to navigate the channels in one direction at a time. The Gaillard Cut and the channel through Gatún Lake will be widened to no less than 280 meters (918 ft) on the straight portions and no less than 366 meters (1,200 ft) on the bends. The maximum level of Gatún Lake will be raised from reference height 26.7 meters (87.5 ft) to 27.1 meters (89 ft).
Each flight of locks will be accompanied by nine water reutilization basins (three per lock chamber), each basin being approximately 70 meters (230 ft) wide, 430 meters (1410 ft) long and 5.50 meters (18 ft) deep. These gravity-fed basins will allow 60% of the water used in each transit to be reused; the new locks will consequently use 7% less water per transit than each of the existing lock lanes. The deepening of Gatún Lake, and the raising of its maximum water level, will also provide significant extra water storage capacity. These measures are intended to allow the expanded canal to operate without the construction of new reservoirs.
The estimated cost of the project is US$5.25 billion. The project is designed to allow for an anticipated growth in traffic from 280 million PC/UMS tons in 2005 to nearly 510 million PC/UMS tons in 2025; the expanded canal will have a maximum sustainable capacity of approximately 600 million PC/UMS tons per year. Tolls will continue to be calculated based on vessel tonnage, and will not depend on the locks used.
The new locks are expected to open for traffic in 2015. The present locks, which will be 100 years old by that time, will then have greater access for maintenance, and are projected to continue operating indefinitely. An article in the February 2007 issue of Popular Mechanics magazine describes the plans for the canal, focusing on the engineering aspects of the expansion project. There is also a follow-up article in the February 2010 issue of Popular Mechanics magazine .
On September 3, 2007, thousands of Panamanians stood across Paraíso Hill in Panama to witness a huge explosion and the launch of the Expansion Program. The first phase of the project will be dry excavations of the 218 meter (715 ft) wide trench connecting the Culebra Cut with the Pacific coast, removing 47 million cubic meters of earth and rock.
Building the new canal
The Flemish (Northern Belgium) dredging company Jan De Nul has been awarded the major Panama Canal contract, together with a consortium of contractors consisting of the Spanish Sacyr Vallehermoso, the Italian Impregilo and the Panamanian company Cusa. The contract will result in 100 million dollars in dredging works over the next few years for the company. In addition, there will also be a great deal of work in the contract for the company’s construction division, with six new locks to be built. The design of the locks is a carbon copy of the Berendrecht lock in the Port of Antwerp, which De Nul helped build in the 1980s and the company still has engineers and specialists who were part of that project. Between six months’ and a year’s worth of analyses and engineering will be required before construction can effectively start.
During the last one hundred years, the Autoridad del Canal de Panamá has appointed a few “Panama Canal Honorary Pilots.” The most recent of these were Commodore Ronald Warwick  a former Master of RMS Cunard’s Queen Mary 2, who has traversed the Canal as Captain more than 50 times, and Captain Raffaele Minotauro, Master Senior Grade, of the former Italian governmental navigation company known in the shipping world as the “Italian Line.”