The Panama Canal – All You Need to Know

A visit to Panama should not conclude without a trip to see the magnificent Panama Canal. In this article you will learn all you need to know about the Panama Canal. This man-made waterway is a lock-type canal, owned and operated by the Republic of Panama. The canal was cut through one of the narrowest parts of the Isthmus of Panama and joins the Atlantic Ocean with the Pacific Ocean. For those who have visited the Panama Canal it is no surprise the Canal is listed as one of the Seven Wonders of the Modern World.

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Description of the Panama Canal

The length of the Panama Canal from one shore to the opposite shore is about 40 miles (65 km) and from the depth of the Atlantic (more specifically, the Caribbean Sea) to the depth of the Pacific about 50 miles (82 km). The canal, which was completed in August 1914, is one of the two most complex artificial waterways in the world, the other being the Suez Canal in Egypt. The purpose of the locks is to bring ships up to the Gatun Lake, 26 meters above sea level as the water rises. The Gatun Lake is an artificial body of water created to lessen the total excavation work needed to build the canal. Upon entering the water, the vessels then sail across the continental divide.  The shortcut offered by the Panama Canal significantly reduces the time for ships to travel between the Atlantic and Pacific oceans and eliminates the need to voyage around the southernmost tip of South America and shortens their journey by about 8,000 nautical miles (15,000 km). Ships can save up to 3,500 nautical miles (6,500 km) on voyages between coasts of North America and ports on the opposite side of South America or between Europe and East Asia or Australia. 

History of the Panama Canal

Panama Canal Early Proposals

The vision of digging a passage through the Isthmus of Panama in order to unite the Atlantic and Pacific oceans goes back to the early 16th century and can be dated as far back as 1513 Isthmian crossing of Vasco Nuñez de Balboa. He pointed out that the two oceans were only separated by a small strip of land.  The Holy Roman Emperor at the time was Charles V, also known Charles I of Spain, he initiated a movement to build a waterway across the Isthmus.

Charles directed the Panama regional governor by decree issued in 1534 to explore a route toward the Pacific following the Chagres River. This was the first inquiry into a proposed naval canal in Panama, which pretty much initiated the existence of today’s Panama Canal. After receiving the survey, the governor concluded that it was impossible for anyone to accomplish such a feat at that time.

Panama Canal Railway

The United States’ interest in the Panama Canal came at a much later date as the sole interest of the U.S. was to join the Atlantic and Pacific oceans across the Central American Isthmus, not necessarily at Panama. In the 19th century the U.S. made good on the opportunity to join the two seas but instead of a canal, they had in mind a railroad. In 1855 a train made its way from the Atlantic Ocean across the Isthmus of Panama to the Pacific Ocean for the first time making the Panama Canal Railway, the world’s first transcontinental railway. After a treasure trove of gold was discovered in California in 1848, the Isthmus of Central America became a vital travel network, mostly overland using the Panama Railroad. As the Isthmus of Panama grew popular, interest in a canal was heightened. Fifty years later, the Panama Railway would prove to be crucial in the construction of the Panama Canal.

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U.S. President Grant and the Canal

The inauguration in 1869 of Ulysses S. Grant as the 18th U.S. President brought new urgency to U.S. canal policy.  The Panamanian Isthmus and Grant had history since in July 1852, he commanded the Fourth American Infantry across the Isthmus of Panama on their way to garrison duty in California.  The military unit of several hundred men and their dependents suffered a deadly cholera epidemic in Panama, killing 150 men, women and children.  Grant wrote later about the tragic event, “The horrors of the road in the rainy season are beyond description.”

President Grant initiated research excursions to Central America in 1869.  The excursions were organized by the Navigation Bureau Chief Commodore, Daniel Ammen and were under the orders of the Navy Secretary.  Assessments were performed in Tehuantepec, Mexico, by Captain Robert W. Shufeldt; in Darien, by Commander Thomas Oliver Selfridge; in Nicaragua, by Commander Chester Hatfield, Commander Edward P. Lull and Chief Civil Engineer Aniceto G. Menocal; and in Panama, by rail, by Lull and Menocal.  The great quality of these studies is still recognized today.  Interestingly, the pathway of the present Panama Canal is almost the same as that proposed in the Panama survey.

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The Interoceanic Canal Commission was authorized by President Grant to review the results of the Navy expeditions that took place between 1870 and 1875.  The Commission compiled a report and, after due diligence, the Commission came out in favor of the Nicaraguan route in 1876.

The U.S. Isthmian Canal Commission of 1899-1901, generally called the second Walker Commission, after its president Rear Admiral John G. Walker, had been ordered, after the collapse of the French canal project, to re-examine all possible alternatives for the development of a waterway between the Atlantic and Pacific Oceans. The report was requested by the U.S. President William McKinley, who was Grant’s successor. This time, particular attention was given to the routes in Panama and Nicaragua. The Nicaragua route was once again the popular choice but that was short-lived.

The Isthmus of Panama

The Isthmus of Panama was approximately 50 miles wide at its narrowest point, depicting mountains, impassable jungles, deep marshlands, heavy rainfall, hot sun, unbearable humidity, plagues and some of the most geographically difficult land formations on the planet. What was not clear was the geological make-up of the terrain, which is consistently a challenge, even up to today. One more point to note was that constructing a canal through Panama had already tested and surpassed the technical expertise of one of the strongest nations on earth. This, in addition to the existence of six major cracks and five massive volcanic cores in a tiny space between Colon and Panama City adds to the area’s geological difficulties.

Factoring into the surveyors’ troubles was the tropical rainforest that covered the highlands from base to peak, the dense vegetation was hard to understand for anyone that was inexperienced or new to it. Similar to Brazil’s Amazon jungle, Panama’s tropical climate, temperature and rainfall create an ideal environment for jungle growth. 

Flooding, particularly of the Chagres River, was another very severe problem. Thanks to the precipitous slopes of the landscape, heavy rainfall immediately collects into streams that flow swiftly into the river, allowing it to swell at a rapid rate, producing floods. The French engineers under de Lesseps were unable to control the Chagres floods, and the American effort did not succeed until the construction of the Madden Dam above Gamboa in the 1930s. The French had to constantly endure the disappointing destruction of bridges and equipment and the redepositing of thousands of tons of earth, rock and debris into their already difficult excavation projects.

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Panama Canal Death Toll

The unfortunate nature of the Isthmus continued as both malaria and yellow fever were endemic to the area. Over several hundred years, foreigners came to know this “Fever Coast,” especially seamen en route to other places, succumbed to diseases said to have been caused by “miasmal mists” reportedly arising from swamps and marshes. When the trade winds die out, they are replaced by the hot white mist which is a prelude to fever and sickness. The thick jungle had poisonous snakes, insects and spiders and by 1884, mortality was more than 200 a month, making the greatest challenge the yellow fever, malaria and other tropical diseases that killed thousands of workers. Public health efforts were unsuccessful because the role of the mosquito as a vector for disease was unclear at that time. Work conditions painted a colorful picture in France in order to avoid difficulties with recruiting, however the high mortality rate made it difficult to retain a skilled workforce. Over 25,000 people died building the Panama Canal, mostly from disease. Approximately 20,000 died when the French attempted to build the canal, and over 5,000 died when the Americans successfully built the canal.

Today, the hot, white mists may seem ridiculous, however, it was ultimately proven that the bites of insects, namely mosquitoes, carry diseases such as yellow fever and malaria. With the limited medical research at the time, if the Americans had arrived at the Isthmus before the French, they would have suffered similarly. History may observe that, in many ways, the fate of French was already decided, even before they arrived on the Isthmus.

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Panama Canal Construction

First Attempt – The French

The first effort to build a canal across Panama’s Isthmus began in 1881, after a concession was granted by the Colombian government to the privately owned Compagnie Universelle du Canal Interocéanique. The organization was funded with French capital from numerous small stakeholders under the guidance of Ferdinand de Lesseps. Since Lesseps ‘ recent victory in building the Suez Canal, he had drawn public approval for the construction of a sea-level canal in Panama. Adolphe Godin de Lépinay, the Baron of Brusly, an engineer who researched isthmus, firmly objected to the idea. 

Lépinay understood Panama’s surface features: the Continental Divide 9 miles (15 km) from the Pacific, the torrential Chagres River that flows into the Atlantic, and the smaller Río Grande that flows into the Pacific — both rivers ideal for the formation of artificial lakes; In 1879 he proposed a “practical” canal-building plan, calling for a dam at Gatún and another at Miraflores (or as close to the sea as the land would allow), letting the waters rise to form two reservoirs about 80 feet (25 meters) high, connecting the lakes by cutting across the Continental Divide, and linking them to the oceans via locks. Lépinay’s idea eventually established him as a genius in architecture and engineering and as the originator of the plan from which the Panama Canal was constructed. However, unfortunately for the French, his concept at the time was ignored and the Compagnie Universelle embarked on its ill-fated undertaking. 

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French Failure 

Lesseps was either unfamiliar with conditions in Panama, or unwilling to acknowledge that they differed greatly from the Suez Canal. Panama was a tropical jungle with flood rains, heat and humidity, and tropical diseases, unlike the arid desert of the Suez Isthmus. The topographical conditions along the proposed route varied significantly and ranged from coastal marshes to the Continental Divide mountains. There was no sound overall plan, despite the competent engineering. Machinery used to build the canal was either too light or unsuitable for the rugged inland environment, and disease took a devastating toll on the workers’ lives.

Development was expensive and painfully slow. The proposals for a sea-level canal were eventually dropped in favor of a high-level lock-type canal as a cost-saving measure but that change had little impact. With no clear return on their investment, the French public therefore lost confidence in the project and its chief. Initiatives for further investment failed, and the company crashed in 1889. Though the company reorganized in 1894, by 1898 it practically ceased to exist. Any chance of completing the canal in Panama was gone; its only hope lay in keeping a business together that could be offered for sale. Overall, less than half of the French’s excavation was used in the U.S. canal.

Second Attempt – The Americans

There might have been no Panama Canal to discuss today if the United States did not pass the Spooner Act of 1902. Congress approved the purchase of the holdings of the French company and the construction of a canal, as long as a suitable treaty could be signed with Colombia (of which Panama was politically aligned). After treaty negotiations with Colombia failed, Panama, with the tacit support of the United States, declared independence. The republic was acknowledged by the United States in November 1903 when Theodore Roosevelt was president. The Hay–Bunau–Varilla Treaty was later signed between the United States and Panama. The treaty complied with the requirements of the Spooner Act and established the Panama Canal Zone; it was declared in February 1904.

The Spooner Act

From the first Senate resolution in 1835 favoring the Nicaragua route to the significant change in the location of the canal under the Spooner Act, the American people and the government have persistently and overwhelmingly supported the canal through Nicaragua. The fact that the canal was built in Panama is mainly due not to the inherent validity of the Panamanian route, but to the cleverness and enthusiasm of two remarkable men who worked separately towards a common goal: French engineer Phillipe-Jean Bunau-Varilla and American lawyer William Nelson Cromwell. Two people provided the political influence that shifted the U.S. government to favour of Panama: the President Roosevelt and Senator Mark Hanna. Roosevelt, once involved, embraced the project so strongly that he was almost unanimously thought of as the “father” of the canal. Most of the actual work on the canal was performed during the presidency of William Howard Taft (1909–13), who had also been active in Roosevelt’s government previously.

When summer 1904 came around, the canal project under the administration of the United States had already begun. The French constructors had rejected the sea level approach in pursuit of a high-level canal with locks, and that was also preferable, as it would reduce costs and prevent possible problems arising from fluctuations in ocean levels at the opposing ends of the canal. But engineers also differed on the type of canal to be constructed, and they confronted another challenge of great importance: how to handle the Chagres River, which rose in the north-eastern highland area of Panama and drained into the Atlantic. 

The Chagres River

From Gamboa to Gatún, the course of the planned canal appeared to follow the river’s pathway as it found its way to the sea. The area’s frequent tropical rainfall fed the river caused immense and unpredictable fluctuations in its flow. If left to its own devices, the threatening flood waters could easily overwhelm a canal built near its path.

The matter of the Chagres River was resolved In 1906 when Pres. Roosevelt agreed with Chief Engineer John Frank Stevens, who supported a lock-type canal. The proposal was eventually accepted by Congress was comparable in all important aspects to the one that was proposed by Lépinay but dismissed by Lesseps. The proposal included a massive earthen dam across the Chagres River at Gatún. The dam formed what was once the largest artificial lake on the planet (Gatún Lake) and meanwhile brought a significant portion of the Chagres River under control. The dam was so huge that it was able to handle most of the river even when it flooded. The measurements of the man-made lake was over 20 miles (32 km) of the canal path.

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The Culebra Cut

The narrowest part of the Canal is Culebra Cut, it covers the north end of Pedro Miguel Locks to the south edge of Gatun Lake at Gamboa. This section, about 13.7 kilometers in length, is chiseled through the rock and shale of the Continental Divide.

Railroads and heavy machinery were critical elements. Most notable was the use of more than 100 steam shovels, many of which were used to dig the Culebra Cut, later called Gaillard Cut after David du Bose Gaillard, the American engineer who supervised its construction until his death in 1913. The unstable nature of the soil and rock in the area of the cut made it one of the most difficult and challenging sections of the entire canal project, however, and numerous lives were lost in landslides and dynamite accidents during that phase of the project. Indeed, hillsides were subject to unpredictable earth slides and mudslides, and at times the floor of the excavation was known to rise precipitously simply owing to the weight of the hillsides. The well-known Cucaracha slide of 1907 continued for years and poured millions of cubic yards into the canal excavation. Workers, often labouring in temperatures of 100 °F (38 °C) or higher, used rock drills, dynamite, and steam shovels to remove as much as 96 million cubic yards (73 million cubic metres) of earth and rock as they lowered the floor of the excavation to within 40 feet (12 metres) of sea level.

Despite all of those challenges, the canal was opened to traffic on August 15, 1914, more than three decades after the first attempt to build the canal had begun. It remains the greatest engineering feat yet attempted.

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Panama Canal Completion

Although the official inauguration of the Panama Canal took place on August 15, 1914, the first complete transit happened a few months before. On January 7, 1914, the first test transit through the Panama Canal was completed by an old French crane boat named Alexandre La Valley.

As expected, the Canal team began disbanding and moving on to other ventures while construction came to a close. This massive engineering project drew thousands of workers who were made redundant as towns built to facilitate construction were demolished or disassembled.    The Isthmian Canal Commission ceased to exist on 1 April 1914 and a new administrative entity, the Canal Zone Governor, was formally assembled.  Colonel Goethals became Panama Canal’s first governor after being confirmed by the Senate unanimously.

Plans for a grand celebration were made to adequately mark the official opening of the Panama Canal on August 15, 1914.  A fleet of international naval ships was to gather off Hampton Roads on New Year’s Day 1915, then set sail for San Francisco through the Panama Canal in order to arrive in time for the opening of the Panama-Pacific International Exposition. Sadly, there was no such grand opening. Even though the Panama Pacific Exposition proceeded as planned, World War I forced the canal to cancel parts of the planned festivities.

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Panama Canal Cost

The Panama Canal construction project dug deep into the pockets of the United States and cost a whopping $375,000,000, including a $10,000,000 sum paid to Panama and another $40,000,000 paid to the French company.  At the time, no other U.S. construction project rivaled the cost of the canal. In addition, fortifications cost around $12,000,000

And here’s the kicker, this massive, complicated, never before accomplished project was completed without any of the usual scandal or corruption common to such efforts. To this day, not even a rumor of a scandal has come to light.

The most significant cost was the loss in lives of many who suffered sickness and physical hazards for the existence of this unprecedented project.  According to hospital records, when the Americans managed the canal project, 5,609 lives were lost from disease and accidents.  Combining the death toll from the French construction period would probably bring the total deaths to an estimated 25,000. Regrettably, the true number will never be known since the French only recorded deaths that happened at hospitals.

Panama Canal Treaties and Ownership

The Hay–Bunau-Varilla Treaty

From the moment the Hay–Bunau-Varilla Treaty was signed in 1903, it was immedialety denounced by the Panamanian population as a breach of their recent national sovereignty. The treaty had been communicated and negotiated for the newly established republic by Philippe-Jean Bunau-Varilla, a French citizen who had not visited Panama in 18 years. He later publicly admitted that he was prepared to have Panama pay any price necessary to ensure the U.S. Senate accepted the agreement. From the Panamanian point of view, the most demanding part of the treaty was the right of sovereignty granted to the U.S. over the entire 10 mile stretch of the Canal Zone. Therefore, the Canal Zone became a foreign colony that divided Panama even though Theodore Roosevelt declared in 1906 that wasn’t the United States’ intention. 

The Canal Zone was administered by an American governor appointed by the U.S. president and judicial disputes were decided before magistrates appointed by the governor or a circuit court judge appointed by the president. Under the Panama Canal Company, an American corporate entity, the governor’s responsibility was to operate and maintain the canal like a business. Additionally, in order to safeguard the operation of the canal during war, U.S. military units were stationed in the Canal Zone.

Subsequent treaties have improved some of the stricter impacts of the Hay – Bunau-Varilla Treaty, mainly those of 1936 and 1955. The United States gave up its right to claim more lands and waters near the canal, allowed Panamanian control over the ports at Colón and Panama City, and increased the wages of Panamanians employed in the Canal Zone closer to the wages of the Americans. Even so, the Panamanians kept pressing for more significant changes, including the possibility of sovereignty over the canal. 

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The Neutrality Treaty

The 1977 Treaty was complemented by a separate, but closely linked, Treaty of Neutrality which also came into effect in 1979 and has no termination date. Under the Neutrality Treaty, the United States and Panama ensure the canal’s permanent neutrality, with non-discriminatory tolls and access for all nations; however, U.S. and Panamanian warships are entitled to swift passage. No other nation than Panama may operate the canal or maintain military bases within the territory of Panama. However, the United States reserved the right, if necessary, to use military force to keep the canal open.

The Panama Canal Treaty

After years of negotiation, an agreement was reached between the two governments in 1977 and the Panama Canal Treaty was signed on September 7 of that year. It terminated all prior treaties between the United States and Panama concerning the canal and abolished the Canal Zone. The treaty was then implemented into U.S. domestic law by the Panama Canal Act of 1979. The treaty acknowledged Panama as territorial owner in the former Canal Zone, but it gave the United States the right to continue managing, operating, and maintaining the canal and to use lands and waters necessary for those purposes during a transition period of 20 years covered by the agreement. The treaty also provided for joint study of the possibility of a sea-level waterway and gave the United States the right to add a third lane of locks to the existing canal, though those were never built by the United States. The treaty went into effect on October 1, 1979, and expired on December 31, 1999 with the turnover of the canal to the Panama Canal Authority (ACP).

How does the Panama Canal Work?

The Panama Canal serves as a maritime shortcut that saves time and costs in transporting all kinds of goods. The 80-kilometer waterway communicates the Atlantic and Pacific Oceans in one of the narrowest points of the American Continent. 

Since its opening in 1914, more than one million ships from all over the world have transited the Canal. The historic millionth mark was reached on September 4, 2010 with the transit of the Chinese bulk carrier, Fortune Plum. The interoceanic waterway uses a system of locks with two lanes that operates as water elevators and raises the ships from sea level to the level of Gatun Lake, 26 meters above sea level, to allow the crossing though the Continental Divide, and then lowers the ships to sea level on the other side of the Isthmus. 

The water used to raise and lower the vessels in each set of locks is obtained from Gatun Lake by gravity and poured into the locks through a main culvert system that extends under the locks chamber from the sidewalls and the center wall.

Panama Canal Locks

The Gatún and Miraflores Locks

The canal locks are controlled by the gravity flow of the water from Gatún, Alajuela, and Miraflores basins which are supplied by the Chagres as well as other rivers. The locks themselves are of uniform length, width and depth and were built in pairs to allow the vessels to transit simultaneously in either direction. Each lock gate has two leaves set on hinges, 65 feet (20 metres) wide and 6.5 feet (2 metres) thick. The gates range from 46 to 82 feet (14 to 25 metres) in height; their movement is powered by recessed electric motors in the lock walls. They are operated from a control tower situated on a wall that separates each pair of locks and from which the flood or clearing of the locking chambers is also controlled. The lock chambers are 1,000 feet (300 meters) long, 110 feet (33 meters) wide and 40 feet (12 meters) deep.

Due to the delicate nature of the original locking mechanisms, only small vessels are allowed to pass through the locks unassisted. Larger vessels are steered by electric towing locomotives, which operate on cog tracks on the lock walls, their purpose is to keep the ships centered in the lock. A fender chain, extended between the walls of the entrance, must be passed before a lock can be reached. If all is proceeding properly, the chain will fall into its groove at the bottom of the channel. Unless, by any chance, the ship moves too fast for safety the chain will stay extended and the vessel will crash against it. The chain, which is powered by hydraulic machinery in the walls, will then pay out gradually by automatic release until the vessel has been brought to a stop. If the vessel was to get away from the towing locomotive and, breaking through the chain, ram the first gate, a second gate 50 feet (15 meters) away would protect the lock and stop it from going further.

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The Cocoli and Agua Clara Locks

The third lock system of the Third Set of Locks Project, launched in 2007, was inspired by the Berendrecht lock in Antwerp, Belgium, and the water-saving basins used in canals in Germany. Some 190,000 tons of steel, mostly from Mexico, are enclosed in heavily reinforced concrete to construct lock chambers on the Atlantic and Pacific ends, and the new lock gates measure up to 33 feet (10 meters) wide, 98 feet (30 meters) high and 190 feet (58 meters) long. The new chambers and basins, which control the flow flow of water from Gatún Lake, were designed to minimize the turbulence of the flow of water and the disturbance of the transiting ships. The reservoirs were completed in June 2016 and consist of 158 valves made of 20,000 tons of structural material. Officials say the water-saving basins are the largest in the world and make it easier for 60 per cent of the water to be reused. While the current locks use 52 million gallons (197 million litres) for each use, the new locks use 48 million gallons (182 million litres).

Panama Canal Expansion

The construction of the Madden Dam and Power Project, completed in 1935, was the first major capital improvement on the canal That not only stemmed and regulated the flow of water to Gatún Lake at a rate of some 200 billion cubic feet (6 billion cubic meters) per year, but also created a large basin, Lake Madden (now Alajuela Lake). It also increased the output of electricity in the region. The Boyd-Roosevelt Highway was then constructed across the isthmus, adding a third means of transport to the waterway and the railroad. In 1955, the Thatcher Ferry Bridge (now known as the Bridge of the Americas) was built, connecting Panama City and Balboa to the west side of the canal. From 1957 to 1971 Gaillard Cut (also known as the Culebra Cut) was extended from its original 300 feet (90 metres) to 492 feet (150 metres).

Panama Canal First Expansion Program

In 1991, within two years of the final change of power, the Panama Canal Authority commenced its first expansion program, a $219 million project to extend the nearly 8.5-mile- (14-km-) long Gaillard Cut from 500 feet (152 metres) to a maximum of 728 feet (222 metres). Completed in 2001, the major development enabled two-way passage of larger Panamax ships and decreased the average canal travel time by about 6 hours to about 10 hours total. The ACP invested an additional $54 million in new lock locomotives, new tracks and tugboats, conversion of mitre gate locks to hydraulics, and a $30 million GPS vessel tracking system.

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Panama Canal Second Expansion Program

Notwithstanding these upgrades, many supertankers and large naval vessels were still too large to move through the canal. There was a lot of analysis of the feasibility of either extending the current canal and locks or building a larger sea-level canal at another site. Cost and environmental concerns eliminated the latter option, and in 2006 the Panamanian government and voters supported the Third Set of Locks Project, a $5.2 billion expansion program to increase the width of the Gatún Lake mapping channels to 920 feet (280 meters) in straight sections and 1,200 feet (366 meters) in turning points to enable cross-navigation.

In 2012, ACP declared an eight-month delay due to extensive challenges associated with the procurement of concrete made with a 100 year design life, a week-long strike by one of Panama’s main construction groups, and bad weather. With the expected completion of the Third Set of Locks Project being pushed back to 2016, construction was still ongoing during the canal’s one hundred year anniversary in 2014. The newly expanded waterway opened on June 26, 2016.

A third bridge known as the Atlantic Bridge was opened above the canal’s Atlantic entrance in August 2019. The new bridge was replacement for a nearby bridge that was built in 1942 and disassembled in 2018 as well as the Panama Canal Ferry. It remains the only bridge north of the Culebra Cut.

Completed Panama Canal Expansion

After an ambitious construction program (2009-2016), the Cocoli and Agua Clara Locks added a third lane to the Panama Canal for the passage of larger Neopanamax vessels. Since its grand opening on June 26, 2016, the Expanded Canal has not only exceeded traffic expectations, but has also reinforced its environmental leadership in the maritime industry, maximizing water savings and contributing to the reduction of CO2, being a shorter route and offering its customers greater cargo capacity.

Containerships make up for more than half of the traffic through the Expanded Canal, followed by liquefied petroleum gas (LPG) carriers and liquefied natural gas (LNG) carriers. Other crafts such as bulk carriers, tankers, car carriers and passenger vessels have also traveled the Neopanamax Locks.

LNG ships started using the waterway initially after the opening of the Expanded Canal. Since then, this market has experienced steady growth. More than 90 percent of the LNG world’s fleet can now travel via the Panama Canal, which opened the doors to a new market and allows LNG producers in the United States to send natural gas to Asia at competitive prices.

LPG vessel traffic has grown tremendously since the Expanded Canal’s opening and has claimed its place as the second largest segment of traffic through the Neopanamax Locks.

In serving its purpose, the expanded canal offers greater connectivity to world maritime trade.

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Panama Canal Tolls

As in the case of a toll road, the vessels transiting the canal must pay tolls. Canal tolls are calculated by the Panama Canal Authority and are dependent on the kind of vessel, size and type of cargo.

Container Ships

In the case of container ships, the toll is assessed on the ship’s capacity conveyed in twenty-foot equivalent units (TEUs), one TEU is the size of the standard intermodal container. Starting April 1, 2016, this toll ranged from US$ 74 per loaded container to $60 per TEU capacity plus $30 per loaded container for almost $90 per TEU when the ship is loaded. A Panamax container ship can carry up to 4,400 TEUs. The toll is structured differently for passenger ships and for container ships that are not carrying cargo.

Passenger Vessels

Passenger vessels carrying more than 30,000 tons (PC / UMS), commonly known as cruise ships, pay a rate based on the number of berths, i.e. the number of passengers that can be hosted in permanent beds. After April 1, 2016, the per-berth rate has been $111 for unoccupied berths and $138 for occupied berths in Panamax locks. Since 2007, this charge has significantly increased the tolls for such ships. Passenger vessels with less than 30,000 tons or less than 33 tons per passenger are billed on the same per-ton schedule as freighters.

Almost every other type of vessel pays toll per PC/UMS net ton, in which one ton is actually a volume of 100 cubic feet (2.83 m3). Since 2016 fiscal year, this toll is US$5.25 per ton for the first 10,000 tons, US$5.14 per ton for the next 10,000 tons, and US$5.06 per ton after the aforementioned. Similar to container ships, reduced tolls are charged for freight ships carrying no cargo, $4.19, $4.12, $4.05 respectively.

New Toll System

A more complex toll system was introduced on 1 April 2016, with the neopanamax locks at a higher rate in some instances, the transport of natural gas as a new separate category, and other improvements. As of 1 October 2017, there are updated tolls and categories of tolls in place. Small vessels (less than 125 ft) of 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, are evaluated for minimum tolls on the basis of overall length, as shown in the table below (as of April 29, 2015):

Panama Canal Tolls
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First Panama Canal Toll

Morgan Adams of Los Angeles, California, holds the distinction of paying the first toll received by the United States Government for the use of the Panama Canal by a pleasure boat. His boat Lasata passed through the Zone on August 14, 1914. The crossing occurred during a 6,000-mile sea voyage from Jacksonville, Florida, to Los Angeles in 1914.

Most Expensive/Lowest Panama Canal Toll

The most expensive regular toll for canal passage was charged on April 14, 2010 to the cruise ship Norwegian Pearl, which paid US$375,600. With the opening of the new, larger locks as part of the canal expansion, this record has been significantly broken, as much larger ships can now pass through the canal. One of the most recent records took place on July 6th, 2016, when the MOL Benefactor, a 10,000 TEU cargo ship paid $829,000 to transit the new locks. It is expected that when a post-Panamax ship (which can hold up to 13,000 TEU of cargo) transits the new canal, that the record toll will pass $1 million.

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 work on the Gatun Locks, and thus avoiding a seven-day delay. The normal fee would have been just US$13,430.

The lowest toll ever paid was 36 cents (equivalent to $5.36 in 2019), by American Richard Halliburton who swam the Panama Canal in 1928.

Panama Canal Tour

A visit to Panama isn’t complete without a tour of the Panama Canal. In order to truly appreciate the operation of the canal and what it means to Panama you may want to watch a documentary to prepare you for your visit. There are several ways to have a unique Panama Canal experience including visiting museums, dining by the canal, or going for a ride through the locks.

  • The Miraflores Visitor Center – The most popular way to see the Panama Canal is by visiting the Miraflores Visitor Center, which is about a 20-minute drive from Panama City. There is a viewing deck with an interactive museum from where you can watch the locks in action as gigantic cargo and cruise ships pass through the Miraflores Locks. 
  • Transit The Canal – It is possible to transit through the canal locks by booking a partial transit tour. The tour lasts approximately 6 hours and includes a well-informed guide that will explain how the canal works and other interesting facts.
  • Drive Over The Gatun Locks – If you have access to a car you can definitely drive over the Gatun Locks on the Colón side of Panama. The scenic view is great for photos and takes you as close as you can get without actually going through the waterway.
  • Agua Clara Visitor Center – Since the expansion project there is a new viewing center overlooking the Agua Clara Locks in Colón. The only difficulty is the center is 1.5 hours from Panama City and there is no organized direct means of transport for tourists so it requires renting a car or booking a tour in order to make a visit. 
  • Ocean To Ocean Canal Tour – An ocean to ocean tour is a fantastic way to get the most out of a visit to the Panama canal. This tour may include visiting the old and newly expanded locks and making a few stops such as the famous Monkey Islands or lunch at scenic locations overlooking the Caribbean. 

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Panama Canal Museum

The Panama Canal Museum is a non-profit museum that is open to the general public in Panama’s old city, Casco Viejo. It displays the history of the completion of the Panama Canal, a key link in the world’s shipping trade, and the measures taken to construct the waterway, including the first attempt by the French to build a pathway through the isthmus. The building it occupies has historical significance due to the fact it was built around 1874 and served as the original headquarters of both contractors from the French Canal Company and the United States Isthmian Canal Commission. The Canal Museum is loaded with planning materials and interesting artifacts from the construction.


The construction of the third set of locks during the expansion inspired numerous articles, reports, and studies speculating on how the passage of larger post-Panamax ships through the canal would have an impact on global shipping patterns. In 2012 the ACP hosted its first Engineering and Infrastructure Congress, which gained the attention of hundreds of geotechnical, electrical, structural and civil engineering practitioners, as well as exhibitors and vendors, and featured multiple sessions to discuss the ongoing issues associated with the canal expansion.

Ships from all over the world journey through the Panama Canal on a daily basis with around 13,000 to 14,000 vessels using the waterway every year. The canal serves more than 144 shipping routes connecting 160 countries and reaching about 1,700 ports in the world. The canal is kept in operation by approximately 10 thousand employees ensuring that rain or shine it operates 24 hours a day, 365 days a year, providing transit service to vessels of all countries without prejudice.

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