|The Panama Canal|
A schematic of the Panama Canal, illustrating the sequence of locks and passages
|Locks||3 locks up, 3 down per transit; all two lanes
(2 lanes of locks; locks built in three sites)
|Status||Open, extension in process|
|Navigation authority||Panama Canal Authority|
|Original owner||La Société internationale du Canal|
|Principal engineer||John Findlay Wallace (1904–05), John Frank Stevens (1905–07), George Washington Goethals (1907–14)|
|Date of first use||August 15, 1914|
The Panama Canal (Spanish: Canal de Panamá) is a 77.1-kilometre (48 mi) ship canal in Panama that connects the Atlantic Ocean (via the Caribbean Sea) to the Pacific Ocean. The canal cuts across the Isthmus of Panama and is a key conduit for international maritime trade. There are locks at each end to lift ships up to Gatun Lake, an artificial lake created to reduce the amount of excavation work required for the canal, 26 metres (85 ft) above sea level. The current locks are 33.5 metres (110 ft) wide. A third, wider lane of locks is currently under construction and is due to open in 2015.
France began work on the canal in 1881, but had to stop because of engineering problems and high mortality due to disease. The United States took over the project in 1904, and took a decade to complete the canal, which was officially opened on August 15, 1914. One of the largest and most difficult engineering projects ever undertaken, the Panama Canal shortcut greatly reduced the time for ships to travel between the Atlantic and Pacific Oceans, enabling them to avoid the lengthy, hazardous Cape Horn route around the southernmost tip of South America via the Drake Passage or Strait of Magellan. The shorter, faster, and safer route to the U.S. West Coast and to nations in and around the Pacific Ocean allowed those places to become more integrated with the world economy. It takes between 20 and 30 hours to traverse the canal.
During construction, ownership of the territory that is now the Panama Canal was first Colombian, then French, and then American. The US continued to control the canal and surrounding Panama Canal Zone until the 1977 Torrijos–Carter Treaties provided for handover to Panama. After a period of joint American–Panamanian control, the canal was taken over by the Panamanian government in 1999, and is now managed and operated by the Panama Canal Authority, a Panamanian government agency.
Annual traffic has risen from about 1,000 ships in 1914, when the canal opened, to 14,702 vessels in 2008, the latter measuring a total of 309.6 million Panama Canal/Universal Measurement System (PC/UMS) tons. By 2008, more than 815,000 vessels had passed through the canal; the largest ships that can transit the canal today are called Panamax. The American Society of Civil Engineers has named the Panama Canal one of the seven wonders of the modern world.
- 1 History
- 2 Canal
- 3 Current issues
- 4 Future developments
- 5 Panama Canal Honorary Pilots
- 6 See also
- 7 References
- 8 Further reading
- 9 External links
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 the Americas that would ease the voyage for ships traveling between Spain and Peru. Such a route would have given the Spanish a military advantage over the Portuguese. During an expedition from 1788 to 1793, Alessandro Malaspina outlined plans for its construction.
Given the strategic location of Panama and the potential offered by its narrow isthmus separating two great oceans, other trade links in the area were attempted over the years. The ill-fated Darien scheme was launched by the Kingdom of Scotland in 1698 to set up an overland trade route. Generally inhospitable conditions thwarted the effort, and it was abandoned in April 1700.
In 1849, the discovery of gold in California created great interest in a crossing between the Atlantic and Pacific Oceans. The Panama Railway was built to cross the isthmus, and opened in 1855. This overland link became a vital piece of Western Hemisphere infrastructure, greatly facilitating trade and largely determining the later canal route.
An all-water route between the oceans was still seen as the ideal solution, and in 1855 William Kennish, a Manx-born engineer working for the United States government, surveyed the isthmus and issued a report on a route for a proposed Panama Canal. His report was published in a book entitled The Practicality and Importance of a Ship Canal to Connect the Atlantic and Pacific Oceans.
In 1877 Armand Reclus, an officer with the French Navy, and Lucien Napoléon Bonaparte Wyse, two engineers, surveyed the route and published a French proposal for a canal. French success in building the Suez Canal, while a lengthy project, encouraged planning for one to cross the isthmus.
French construction attempts, 1881–1894
The first attempt to construct a canal through what was then Colombia's province of Panama began on 1 January 1881. The project, designed as a sea-level canal (i.e., without locks), was under the leadership of Ferdinand de Lesseps, builder of the Suez Canal, with substantial financing and support from Paris. The cost and difficulty of construction in the rain-soaked tropics through unstable mountains exceeded expectations, and the French effort eventually went bankrupt after reportedly spending US$287,000,000 and losing an estimated 22,000 lives to accident and disease.
The French rushed to begin work, with insufficient prior study of the geology and hydrology of the region, and the men who started and directed the project had little or no engineering training or experience. Canals cut through mountains had to continually be widened, and their slopes reduced, to minimize landslides into the canal. Steam shovels had been invented but were still primitive. Other mechanical and electrical equipment was limited in its capabilities, and steel equipment rusted rapidly in the climate.
Health risks posed to workers in the mosquito-infested Panamanian jungle, principally malaria and yellow fever, cost thousands of lives. Public health measures were ineffective because the role of the mosquito as a disease vector was then unknown. Conditions were downplayed in France to avoid recruitment problems, but the high mortality made it difficult to maintain an experienced workforce. Beyond the health and technical difficulties, financial mismanagement and political corruption also contributed to the French failure.
By 1889 the company was bankrupt, and work was suspended on May 15. In the ensuing scandal, known as the Panama affair, various of those deemed responsible were prosecuted. Charles De Lesseps, son of Ferdinand De Lesseps, was found guilty of misappropriation of funds and sentenced to five years' imprisonment, though this was later overturned.
In 1894, a second French company, the Compagnie Nouvelle du Canal de Panama, was created to take over the project. A minimal workforce of a few thousand people was employed primarily to comply with the terms of the Colombian Panama Canal concession, to run the Panama Railroad, and to maintain the existing excavation and equipment in salable condition. The company sought a buyer for these assets, with an asking price of US$109,000,000.
At this time, the President and the Senate of the United States were interested in establishing a canal across the isthmus, with some favoring a route across Nicaragua (see Nicaragua Canal) and others advocating the purchase of the French interests in Panama. In June 1902, the U.S. Senate voted in favor of pursuing the Panamanian option, provided the necessary rights could be obtained.
On January 22, 1903, the Hay–Herrán 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 sometimes misinterpreted as the "99-year lease" because of misleading wording included in article 22 of the agreement. The treaty was ratified by the U.S. Senate on March 14, 1903, but the Senate of Colombia did not ratify it. Phillipe Bunau-Varilla, chief engineer and significant shareholder of the French canal company, told President Theodore Roosevelt and Hay of a possible revolt by Panamanian rebels who aimed to separate from Colombia, and hoped that the United States would support the rebels with U.S. troops and money. Roosevelt changed tactics, promising support for the separation of Panama from Colombia.
On November 2, 1903, U.S. warships blocked sea lanes for possible Colombian troop movements en route to put down the rebellion. Panama declared independence the next day, November 3, 1903. The United States quickly recognized the new nation. On 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 Zone and its defenses. Although Bunau-Varilla was serving as Panama's ambassador, he was a French citizen and not officially authorized to sign treaties on behalf of Panama without Panamanian review. This would later become a contentious diplomatic issue between Colombia, Panama and the United States.
President Roosevelt infamously stated that "I took the Isthmus, started the canal and then left Congress not to debate the canal, but to debate me". Several parties in the United States opposed this act of war on Colombia: the New York Times called the support given by the United States to Mr. Bunau-Varilla an "act of sordid conquest." The New York Evening Post called it a "vulgar and mercenary venture." More recently, historian George Tindall labeled it "one of the greatest blunders in American foreign policy." It is often cited as the classic example of U.S. gunboat diplomacy in Latin America, and the best illustration of what Roosevelt meant by the old African adage, "speak softly and carry a big stick [and] you will go far". After the revolution in 1903, the Republic of Panama became a U.S. protectorate until 1939.
In 1904, the United States bought the French equipment and excavations, including the Panama Railroad, for US$40 million, of which $30 million related to excavations completed, primarily in the Gaillard Cut (then called the Culebra Cut), valued at about $1.00 per cubic yard. The United States also paid the new country of Panama $10 million plus $250,000 more each year. (In 1921, the United States paid Colombia US$10 million, plus US$250,000 per annum for several years; in return, Colombia recognized Panama under the terms of the Thomson–Urrutia Treaty.)
U.S. construction, 1904–1914
The U.S. formally took control of the canal property on May 4, 1904, inheriting from the French a depleted workforce and a vast jumble of buildings, infrastructure and equipment, much of it in poor condition. A U.S. government commission, the Isthmian Canal Commission (ICC), was established to oversee construction and was given control of the Panama Canal Zone, over which the United States exercised sovereignty. The commission reported directly to Secretary of War William Howard Taft and was directed to avoid the inefficiency and corruption that had plagued the French 15 years earlier.
On May 6, 1904, President Theodore Roosevelt appointed John Findlay Wallace, formerly chief engineer and finally general manager of the Illinois Central Railroad, as chief engineer of the Panama Canal Project. Overwhelmed by the disease-plagued country and forced to used often dilapidated French infrastructure and equipment, as well as being frustrated by the overly bureaucratic ICC, Wallace resigned abruptly in June 1905. He was succeeded by John Frank Stevens, a self-educated engineer who had built the Great Northern Railroad. Stevens was not a member of the ICC; he increasingly viewed its bureaucracy as a serious hindrance and ended up bypassing the commission and sending requests and demands directly to the Roosevelt Administration in Washington.
One of Stevens' primary achievements in Panama was in building and rebuilding the housing, cafeterias, hotels, water systems, repair shops, warehouses, and other infrastructure needed by the thousands of incoming workers. Stevens began the recruitment effort to entice thousands of workers from the United States and other areas to come to the Canal Zone to work, and tried to provide accommodation in which the incoming workers could work and live in reasonable safety and comfort.
In 1905, a U.S. engineering panel was commissioned to review the canal design, which still had not been finalised. It recommended to President Roosevelt a sea-level canal, as had been attempted by the French. However, more extensive engineering studies favored a canal using a lock system to raise and lower ships from a large reservoir 85 ft (26 m) above sea level. This would create both the largest dam (Gatun Dam) and the largest man-made lake (Gatun Lake) in the world at that time. The water to refill the locks would be taken from Gatun Lake by opening and closing enormous gates and valves and letting gravity propel the water from the lake. Gatun Lake would connect to the Pacific through the mountains at the Gaillard (Culebra) Cut. Stevens successfully argued the case against the sea-level canal, convincing Roosevelt of the necessity and feasibility of the alternative scheme.
The construction of a canal with locks required the excavation of more than an additional 170,000,000 cu yd (129,974,326 m3) of material over and above the 30,000,000 cu yd (22,936,646 m3) excavated by the French. As quickly as possible, the Americans replaced or upgraded the old, unusable French equipment with new construction equipment that was designed for a much larger and faster scale of work. About 102 new large, railroad-mounted steam shovels were purchased and brought in from the United States. These were joined by enormous steam-powered cranes, giant hydraulic rock crushers, cement mixers, dredges, and pneumatic power drills, nearly all of which was manufactured by new, extensive machine-building technology developed and built in the United States. The railroad also had to be comprehensively upgraded with heavy-duty, double-tracked rails over most of the line to accommodate new rolling stock. In many places, the new Gatun Lake flooded over the original rail line, and a new line had to be constructed above Gatun Lake's waterline.
Colonel William C. Gorgas was appointed chief sanitation officer of the canal construction project in 1904. Gorgas implemented a range of measures to minimize the spread of deadly diseases, particularly malaria and yellow fever, which had recently been shown to be mosquito-borne following the work of Dr. Carlos Finlay and Dr. Walter Reed. There was investment in extensive sanitation projects, including city water systems, fumigation of buildings, spraying of insect-breeding areas with oil and larvicide, installation of mosquito netting and window screens, and elimination of stagnant water. After two years of extensive work, the mosquito-spread diseases were nearly eliminated (see also Health measures during the construction of the Panama Canal). Nevertheless, even with all this effort, about 5,600 workers died of disease and accidents during the U.S. construction phase of the canal.
In 1907, Stevens resigned as chief engineer. His replacement, appointed by President Theodore Roosevelt, was U.S. Army Major George Washington Goethals of the U.S. Army Corps of Engineers (soon to be promoted to lieutenant colonel and later to colonel), a strong, United States Military Academy–trained leader and civil engineer. Goethals would direct the work in Panama to a successful conclusion.
Goethals divided the engineering and excavation work into three divisions: Atlantic, Central, and Pacific. The Atlantic division, under Major William L. Sibert, was responsible for construction of the massive breakwater at the entrance to Limon Bay, the Gatun locks and their 5.6 km (3.5 mi) approach channel, and the immense Gatun Dam. The Pacific Division, under Sydney B. Williamson (the only civilian member of this high-level team), was similarly responsible for the Pacific 4.8 km (3.0 mi) breakwater in Panama Bay, the approach channel to the locks, and the Miraflores and Pedro Miguel locks and their associated dams and reservoirs.
The Central division, under Major David du Bose Gaillard of the United States Army Corps of Engineers, was assigned one of the most difficult parts: excavating the Gaillard Cut (then called the Culebra Cut) through the continental divide to connect Gatun Lake to the Pacific Panama Canal locks.
The building of the canal was completed in 1914, 401 years after Panama was first crossed by Vasco Núñez de Balboa. The United States spent almost $375,000,000 (roughly equivalent to $8,600,000,000 now) to finish the project. This was by far the largest American engineering project of that or any previous era. The canal was formally opened on August 15, 1914, with the passage of the cargo ship SS Ancon.
- See also Future developments, below.
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 provides 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 that 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.
Jimmy Carter's speech upon signing the Panama Canal treaty, 7 September 1977.
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After World War II, U.S. control of the canal and the Canal Zone surrounding it became contentious; relations between Panama and the United States 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 there. Demands for the United States to hand over the canal to Panama increased after the Suez Crisis in 1956, when the US used financial and diplomatic pressure to force France and the UK to abandon their attempt to retake control of the Suez Canal, previously nationalized by the Nasser regime in Egypt. Unrest culminated in riots on Martyr's Day, January 9, 1964, when about 20 Panamanians and 3–5 U.S. soldiers were killed.
A decade later, in 1974, negotiations toward a settlement began and resulted in the Torrijos–Carter Treaties. On September 7, 1977, the treaty was signed by President of the United States Jimmy Carter and Omar Torrijos, de facto leader of Panama. 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. The Panama Canal remains one of the chief revenue sources for Panama.
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 interest owned by Li Ka-shing.
While, globally, the Atlantic Ocean is east of the isthmus and the Pacific to the west, the general direction of the canal passage from the Atlantic to the Pacific is from northwest to southeast. This is because of a local anomaly in the shape of the isthmus at the point the canal occupies. The Bridge of the Americas (Spanish: Puente de las Américas) at the Pacific side is about a third of a degree east of the Colón end on the Atlantic side. Still, in formal nautical communications, the simplified directions "Southbound" and "Northbound" are used.
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 Atlantic to the Pacific is as follows:
- From the formal marking line of the Atlantic Entrance, one enters Limón Bay (Bahía Limón), a large natural harbour. The entrance runs 8.7 km (5.4 mi). It provides a deepwater port (Cristóbal), with facilities like multimodal cargo exchange (to and from train) and the Colón Free Trade Zone (a free port).
- A 2.0 mi (3.2 km) channel forms the approach to the locks from the Atlantic side.
- The Gatun locks, a three-stage flight of locks 1.9 km (1.2 mi) long, lifts ships to the Gatun Lake level, some 26.5 m (87 ft) above sea level.
- Gatun Lake, an artificial lake formed by the building of the Gatun Dam, carries vessels 24.2 km (15 mi) across the isthmus. It is the summit canal stretch, fed by the Gatun river and emptied by basic lock operations.
- From the lake, the Chagres River, a natural waterway enhanced by the damming of Gatun Lake, runs about 8.5 km (5.3 mi). Here the upper Chagres river feeds the high level canal stretch.
- The Culebra Cut slices 12.6 km (7.8 mi) through the mountain ridge, crosses the continental divide and passes under the Centennial Bridge.
- The single-stage Pedro Miguel lock, which is 1.4 km (0.87 mi) long, is the first part of the descent with a lift of 9.5 m (31 ft).
- The artificial Miraflores Lake, 1.7 km (1.1 mi) long, and 16.5 m (54 ft) above sea level.
- The two-stage Miraflores locks, is 1.7 km (1.1 mi) long, with a total descent of 16.5 m (54 ft) at mid-tide.
- From the Miraflores locks one reaches Balboa harbour, again with multimodal exchange provision (here the railway meets the shipping route again). Nearby is Panama City.
- From this harbour an entrance/exit channel leads to the Pacific Ocean (Gulf of Panama), 13.2 km (8.2 mi) from the Miraflores locks, passing under the Bridge of the Americas.
Thus, the total length of the canal is 77.1 km (48 mi).
(links to map & photo sources)
|Bas Obispo Reach|
|Las Cascadas Reach|
|Pedro Miguel Locks|
Artificially created in 1913 by the damming of the Chagres River, Gatun Lake is an essential part of the Panama Canal which forms a water passage between the Atlantic and Pacific Oceans, permitting ship transit in both directions. At the time it was formed, Gatun Lake was the largest man-made lake in the world. The impassable rainforest around the lake has been the best defense of the Panama Canal. Today these areas remain practically unscathed by human interference and are one of the few accessible areas on earth where various native Central American animal and plant species can be observed undisturbed in their natural habitat. World famous Barro Colorado Island, which was established for scientific study when the lake was formed and is today operated by the Smithsonian Institution, is the largest island on Gatun Lake. Many of the most important groundbreaking scientific and biological discoveries of the tropical animal and plant kingdom originated here. Gatun Lake covers about 470 square kilometres (180 sq mi), a vast tropical ecological zone part of the Atlantic Forest Corridor. Ecotourism on the lake has become a worthwhile industry for Panamanians.
Gatun Lake also serves to provide the millions of gallons of water necessary to operate the Panama Canal locks each time a ship passes through, and provides drinking water for Panama City and Colón. Fishing is one of the primary recreational pursuits on Gatun Lake. Non-native Peacock Bass were introduced by accident to Gatun Lake around 1967 by a local businessman, and have since flourished to become the dominant angling game fish in Gatun Lake. Locally called Sargento and believed to be the species Cichla pleiozona, these peacock bass are not a native game fish of Panama but originate from the Amazon, Rio Negro, and Orinoco river basins of South America, where they are called Tucanare or Pavon and considered a premier game fish.
The size of the locks determines the maximum size of a ship that can pass through them. Because of the importance of the canal to international trade, many ships are built to the maximum size allowed. These are known as Panamax vessels. A Panamax cargo ship typically has a DWT of 65,000–80,000 tonnes, but its actual cargo is restricted to about 52,500 tonnes because of the 12.6 m (41.2 ft) draft restrictions within the canal. The longest ship ever to transit the canal was the San Juan Prospector (now Marcona Prospector), an ore-bulk-oil carrier that is 296.57 m (973 ft) long with a beam of 32.31 m (106 ft).
Initially the locks at Gatun had been designed to be 28.5 m (94 ft) wide. In 1908, the United States Navy requested that width be increased to at least 36 m (118 ft), which would allow the passage of U.S. naval ships. Eventually a compromise was made and the locks were built 33.53 m (110.0 ft) wide. Each lock is 320 m (1,050 ft) long, with the walls ranging in thickness from 15 m (49 ft) at the base to 3 m (9.8 ft) at the top. The central wall between the parallel locks at Gatun is 18 m (59 ft) thick and over 24 m (79 ft) high. The steel lock gates measure an average of 2 m (6.6 ft) thick, 19.5 m (64 ft) wide, and 20 m (66 ft) high. 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.
The 2006 third set of locks project will create larger locks, allowing bigger ships to transit through deeper and wider channels. The allowed dimensions of ships will increase by 25% in length, 51% in beam, and 26% in draft, as defined by New Panamax metrics.
Tolls for the canal are set 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 on the ship's capacity expressed in twenty-foot equivalent units (TEUs), one TEU being the size of a standard intermodal shipping container. 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[update], 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 fee has greatly increased the tolls for such ships. Passenger vessels of less than 30,000 tons or less than 33 tons per passenger are charged according to the same per-ton schedule as are 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[update], 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, 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, are 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|
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.
The most expensive regular toll for canal passage to date was charged on April 14, 2010 to the cruise ship Norwegian Pearl, which paid US$375,600. 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 seven-day delay. The normal fee would have been just US$13,430.
In the 99 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 concerns.
Efficiency and maintenance
Opponents to the 1977 Torrijos-Carter Treaties feared that efficiency and maintenance would suffer following the U.S. withdrawal from the Panama Canal Zone; however, this does not appear to have been 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, since 2000, it has ranged between 20 and 30 hours. The accident rate has also not changed appreciably in the past decade, varying between 10 and 30 accidents each year from about 14,000 total annual transits. An official accident is one in which a formal investigation is requested and conducted.
Increasing volumes of imports from Asia, which previously landed on U.S. West Coast ports, are now passing through the canal to the American East Coast. The total number of ocean-going transits increased from 11,725 in 2003 to 13,233 in 2007, falling to 12,855 in 2009. (The canal's fiscal year runs from October through September.) This has been coupled with a steady rise in average ship size and in the numbers of Panamax vessels passing through the canal, so that the total tonnage carried rose from 227.9 million PC/UMS tons in fiscal year 1999 to a record high of 312.9 million tons in 2007, falling to 299.1 million tons in 2009. Despite the reduction in total transits due to the negative impact of vessel size (e.g., the inability of large vessels to pass each other 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 modernizing the canal, with the aim of increasing capacity by 20%. The ACP cites a number of major improvements, including the widening and straightening of the Gaillard Cut to reduce restrictions on passing 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 to 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%. In addition, improvements have been made to the canal's operating machinery, including an increased and improved tug locomotive fleet, the replacement of more than 16 km (10 mi) 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.
In December 2010, record-breaking rains caused a 17-hour closure of the canal; this was the first closure since the United States invasion of Panama in 1989. The rains also caused an access road to the Centenario bridge to collapse.
The canal is currently 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 2009 reached 299.1 million tons of shipping.
To improve capacity, a number of improvements have been imposed on the current canal system. These improvements aim to maximize the possible use of current locking system:
- Implementation of an enhanced locks lighting system;
- Construction of two tie-up stations in Gaillard Cut;
- Widening Gaillard Cut from 192 to 218 metres (630 to 715 ft);
- Improvements to the tugboat fleet;
- Implementation of the carousel lockage system in Gatun locks;
- Development of an improved vessel scheduling system;
- Deepening of Gatun Lake navigational channels from 10.4 to 11.3 metres (34 to 37 ft) PLD;
- Modification of all locks structures to allow an additional draft of about 0.30 metres (0.98 ft);
- Deepening of the Pacific and Atlantic entrances;
- Construction of a new spillway in Gatun, for flood control.
These improvements will enlarge the capacity from 280–90 million PCUMS (2008) to 330–40 PCUMS (2012).
Despite having enjoyed a privileged position for many years, the canal is increasingly facing competition from other quarters. Because canal tolls have risen and as ships have become larger, some critics have suggested that the Suez Canal is now a viable alternative for cargo en route from Asia to the U.S. East Coast. The Panama Canal, however, continues to serve more than 144 of the world's trade routes and the majority of canal traffic comes from the "all-water 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 owing to ice.
Gatun Lake is filled with rainwater, and the lake accumulates excess water during wet months. The water is lost to the oceans at a rate of 101,000 m3 (26,700,000 US gal; 22,200,000 imp gal) per downward lock cycle. Since a ship will have to go upward to Gatun Lake first and then descend, a single passing will cost double the amount; but the same waterflow cycle can be used for another ship passing in the opposite direction. The ship's submerged volume is not relevant to this amount of water. 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 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 water-saving basins at each new lock. These water-saving basins will diminish water loss and preserve freshwater resources along the waterway by reusing water from the basins into the locks. Each lock chamber will have three water-saving basins, which will reuse 60% 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 sea level at the Pacific side is about 20 cm (8 in) higher than that of the Atlantic side due to differences in ocean conditions such as water densities and weather.
As demand is rising for efficient global shipping of goods, 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 larger-than-Panamax ships—will necessitate changes to the canal if it is to retain a significant market share. In 2006 it was anticipated that by 2011, 37% of the world's container ships would 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 330–40 million PC/UMS tons per year; it was anticipated that this capacity would be reached between 2009 and 2012. Close to 50% of transiting vessels were 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, has been approved by the government of Panama, and is in progress, with completion expected in 2014. The cost is estimated at US$5.25 billion, and the project will double the canal's capacity, allowing more traffic and the passage of longer and wider ships. This proposal to expand the canal was approved in a national referendum by about 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 east of the existing Gatun locks, and one southwest of the Miraflores locks, each supported by approach channels. Each flight will ascend from sea level directly to the level of Gatun Lake; the existing two-stage ascent at Miraflores and Pedro Miguel locks will not be replicated. The new lock chambers will feature sliding gates, doubled for safety, and will be 427 m (1,400 ft) long, 55 m (180 ft) wide, and 18.3 m (60 ft) deep. This will allow the transit of vessels with a beam of up to 49 m (160 ft), an overall length of up to 366 m (1,200 ft) and a draft of up to 15 m (49 ft), equivalent to a container ship carrying around 12,000 containers, each 6.1 m (20 ft) in length (TEU).
The new locks will be supported by new approach channels, including a 6.2 km (3.9 mi) channel at Miraflores from the locks to the Gaillard Cut, skirting Miraflores Lake. Each of these channels will be 218 m (720 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 Gatun Lake will be widened to at least 280 m (920 ft) on the straight portions and at least 366 m (1,200 ft) on the bends. The maximum level of Gatun Lake will be raised from 26.7 m (88 ft) to 27.1 m (89 ft).
Each flight of locks will be accompanied by nine water reutilization basins (three per lock chamber), each basin being about 70 m (230 ft) wide, 430 m (1,400 ft) long and 5.50 m (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 Gatun Lake and the raising of its maximum water level will also provide capacity for significantly more water storage. These measures are intended to allow the expanded canal to operate without constructing 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 about 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 be able to give engineers 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.
On September 3, 2007, thousands of Panamanians stood across from Paraíso Hill in Panama to witness a huge initial explosion and launch of the Expansion Program. The first phase of the project will be dry excavations of the 218 meters (715 feet) wide trench connecting the Gaillard Cut with the Pacific coast, removing 47 million cubic meters of earth and rock. By June 2012, a 30 m reinforced concrete monolith had been completed, the first of 46 such monoliths which will line the new Pacific-side lock walls. By early July 2012, however, it was announced that the canal expansion project had fallen six months behind schedule, leading the expansion to open in April 2015 rather than October 2014, as originally planned.
It was announced in July 2009 that the Belgian dredging company Jan De Nul, together with a consortium of contractors consisting of the Spanish Sacyr Vallehermoso, the Italian Impregilo, and the Panamanian company Grupo Cusa, had been awarded the contract to build the six new locks. The contract will result in $100 million in dredging works over the next few years for the Belgian company and a great deal of work for its construction division. The design of the locks is a carbon copy of the Berendrecht Lock, which is 68m wide and 500m long, making it the largest lock in the world. Completed in 1989 by the Port of Antwerp, which De Nul helped build, the company still has engineers and specialists who were part of that project.
In January 2014 a contract dispute threatened the progress of the project.  There was a delay of less than 2 months however, with work by the consortium members reaching goals by June 2014.  
Rival canal in Nicaragua
The Nicaraguan parliament has approved a plan to let a Hong Kong based company design and build a competing canal. According to the deal, the company will also be responsible for taking care of the canal during the next 50 years. The government of Nicaragua hopes this will boost the economy, but the opposition is afraid of failure.
On July 7, 2014, Wang Jing, chairman of the HK Nicaragua Canal Development Investment Co. Ltd. (HKND Group), informed during a discussion group with students from the National Engineering University in Managua, that a route for Nicaragua's proposed canal has been approved. The construction work is expected to start in December, 2014 and will be completed within 5 years.
Panama Canal Honorary Pilots
During the last one hundred years, the Panama Canal Authority has appointed a few "Panama Canal Honorary Pilots." The most recent of these were Commodore Ronald Warwick, a former Master of the Cunard Line's RMS Queen Mary 2, who has traversed the Canal more than 50 times, and Captain Raffaele Minotauro, Master Senior Grade, of the former Italian governmental navigation company known as the "Italian Line."
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- Panama Canal Authority website—Has a simulation showing how the canal works
- Making the Dirt Fly, Building the Panama Canal Smithsonian Institution Libraries
- Canalmuseum—History, Documents, Photographs and Stories
- History of the Canal Zone from CZ Brats
- Judicial Watch, Inc. v. Panama Canal Commission case—archived
- Early stereographic images of the construction University of California
- A.B. Nichols Panama Canal Collection at the Linda Hall Library Archival collection of maps, blueprints, photographs, letters, and other documents, collected by Aurin B. Nichols, an engineer who worked on the canal project through from 1899 until its completion.
- 2700 digitized National Archives public domain images Photos of the building and early days of the Panama Canal digitized by GoZonian.org from the U.S. National Archives and Records Administration. Originally from 8 x 10 glass plates
- S.S. Ancon in transit of the canal, June 11, 1914
- Tugboat Gatun was the first boat through Gatun locks, June 1913
- First water entering Gatun locks, September 26, 1913
- Gatun Lake Benefits
- Panama & the Canal Digital Collection
- New Plans For Panama, by Stephen L. Freeman 1947 article about possible post World War II plans for the Panama Canal including first mention of a sea level canal to replace the locks
- Footage of ships going through Panama Canal in 1917
- The Panama Canal An American Experience Documentary
- 9 Facts about the Panama Canal Expansion - Infographic
- http://www.czbrats.com/Builders/Goethals/geopictures.htm — Collection of Panama Canal pictures
- Expanding the Panama Canal: What Does it Mean for American Freight and Infrastructure?: Hearing before the Committee on Commerce, Science, and Transportation, United States Senate, One Hundred Thirteenth Congress, First Session, April 10, 2013
- The Panama Canal Expansion Project lecture by Alberto Alemán Zubieta, former CEO, Panama Canal Authority, 1996-2012 on April 8, 2014 at the Linda Hall Library