Panama Canal turns 100, and gets ready for more

Friday marks the centennial of the opening of the Panama Canal, an engineering marvel that permanently changed world trade and still plays an essential role in global commerce and promises to keep doing so in the future.

But the history surrounding the canal's construction is far from glorious. It is, instead, filled with failure, political intrigue and death.

The French started digging the canal in the early 1880s. But several years later, after engineering setbacks and an estimated 20,000 worker deaths due to disease and accidents, they abandoned their efforts.

The project was later picked up by the U.S. during the Teddy Roosevelt administration. In 1902, Congress passed legislation funding the canal's construction. At the time, Panama was part of Colombia, and the U.S. began treaty negotiations with the Colombian government.

However, when Colombia turned down the treaty in a dispute over payment, the U.S. backed an anti-Colombian revolution by Panamanians, and Panama became an independent nation in 1903.

The Roosevelt administration quickly jumped in and negotiated a treaty with the new nation's government, establishing the 10-mile-wide strip of land that became the U.S. Canal Zone, along with a one-time payment of $10 million to Panama and an annual annuity of $250,000.

After a decade of intense effort, and at the cost of more than an additional 5,600 workers' lives, the canal opened for business on Aug. 15, 1914.

Its effect on world trade was instantaneous. Establishing a short shipping route between the Atlantic and Pacific -- just 48 miles, or 77 kilometers -- dramatically reduced the length and duration of inter-oceanic shipping. Epic voyages previously had to navigate their way thousands of additional miles around the tip of South America, while adding weeks or even months to travel times.

But America's control over the canal, as the U.S. State Department website delicately puts it, "eventually became an irritant to U.S.-Panamanian relations." In 1977, President Jimmy Carter signed an agreement to cede the waterway's control to Panamanian authorities, an event that finally took place on Dec. 31, 1999.

During its 100 years in existence, over 1 million vessels have transited the Panama Canal, carrying more than 8 billion tons of cargo. And its importance to world trade has grown along with the traffic.

In 1920, just under 2,500 commercial vessels transited the canal. Up to 14,000 ships now pass through it canal annually, representing about 5 percent of total world shipping.

And now the Panama Canal is in the midst of another transition -- a $5.25 billion expansion project that began in 2007. As the Brookings Insitution recently noted, if the construction is completed as expected next year, "larger container ships will expand potential trade volumes between the Americas and Asia -- and more seamlessly connect global markets in the process."

That prospect has spurred many U.S. ports to expand their own facilities in anticipation of the bigger ships heading their way, thanks to the canal's expansion. In Florida, for instance, the Port of Tampa Bay has invested $24 million in new equipment.

"We currently handle about 60,000 containers a year," Port Tampa Bay's CEO Paul Anderson recently told News13. "We hope to increase that, over the next five years, to a quarter of a million and then grow from there."

But the canal's expansion hasn't been without its glitches. As of earlier this year, the project was months behind schedule and dealing with cost overruns.

And now China, which is already funding an alternative Pacific-Atlantic canal project across Nicaragua, is calling on the Panama Canal Authority to consider yet another expansion project -- to accommodate even bigger cargo ships.

  • Bruce Kennedy

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