The global economy will change again thanks to the giant new Panama...

The global economy will change again thanks to the giant new Panama Canal

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Just months ago hundreds of sightseers along with tourists and workers gathered together in the deep concrete canyon of the Panama Canal to take a look at it before it was submerged into the water.

[Image Courtesy of Boston Consulting Group]

The canyons are made of rough concrete and are 11 storeys deep and are the new locks of the Panama Canal that have been made bigger as part of a huge expansion project in the summer.

[Image Courtesy of Boston Consulting Group]

The project for the expansion is now almost complete and many engineers gathered at the locks in May of this year to see the work.

[Image Courtesy of Boston Consulting Group]

The project has been going since 2007 at the cost of around $5.25 billion. It was undertaken to take into account the new generation of container ships. It has the name of the New Panamax and it will wedge in the 1,400 foot length of the locks.

[Image Courtesy of Boston Consulting Group]

The project should also make a huge change to the economy of the US along with the rest of the world as around 10% of the container traffic that went between the US and East Asia may move from the West Coast ports and head to the East by 2020.

[Image Courtesy of Boston Consulting Group]

If this happens it will have a profound effect as the bigger ports situated on the West Coast will have growth rates that are lower and this is going to change the competitive balance of both of the coasts ports. It will also affect the decisions of truck and rail carriers when it comes to routing along with magnifying the trade-off shippers are forced to make between the speed of transportation and the cost of it. At the same time it could change the distribution centres locations.

[Image Courtesy of Boston Consulting Group]

The majority of goods that come into the USA at the moment do so through the West Coast and they are then taken around the country via highways and railways. However when the expansion opens next year things are going to change drastically.

[Image Courtesy of Boston Consulting Group]

Via [Boston Consulting Group]