New Panama locks to open in April, but at higher cost

The new locks at the Pacific end of the Panama Canal began to fill with water this week in preparation for months of testing of their new gates before they open to commercial traffic in April 2016.

The flooding to the Pacific locks, following that of the Atlantic locks earlier this month, puts the $5.25 billion canal expansion project on track with the revised timetable for completion that was established last year.

But when the canal’s third set of locks finally do open next year, the expansion will be a year and a half behind the original opening date of October 2014 and approximately $100 million over the original budget. Nevertheless, Jorge Quijano, the Panama Canal Authority’s Administrator, thinks the canal will make up for lost time and revenue.

“We expect some of the diversion from the West Coast to continue and we expect to grab back most, if not all of what we have lost (to the Suez Canal) by not having post-Panamax vessel capacity,” Quijano said in an interview with JOC.com.

He said shippers have told him that even though the West Coast labor contract with the International Longshore & Warehouse Union was finally signed in May, they expect problems to continue on the landside, so they may shift as much as 10-15 percent of the Asian cargo volume to the East Coast through the Panama Canal. “We have been seeing more utilization of vessels moving through the canal to the East Coast.”

Read more at http://www.joc.com/maritime-news/international-freight-shipping/new-panama-locks-open-april-higher-cost_20150623.html

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