A study on the impact of Panama canal expansion on major stakeholders

With the 100th anniversary of the Panama Canal just past in 2014, local authorities are gearing up for the upcoming reopening of the canal after an almost decade-long expansion project that sees the canal adding a new set of locks and widening it to allow much larger vessels (up to 12,600TEUs) to pass through. As the expansion nears completion, discussions of its long-term sustainability and effects on shipping start to grow. Being one of the key transit channels of the world’s shipping trade routes; the expansion is expected to have significant impact on the maritime industry. Thus, this paper aims to investigate the impacts of the Panama Canal expansion on major stakeholders in the industry such as canal users, port users and Panama itself. Out of three work packages, this paper focuses on the impacts of the expansion on Panama; such as the benefits it brings to the economy. It also discusses the weaknesses of Panama Canal that could undermine its effectiveness and external threats and opportunities that can make Panama and its canal prosper, or cause its demise. Secondary research was consolidated and validated with surveys and interviews with industry players. Results indicate that the Panama Canal will continue to remain as a key contributor to Panama’s economy and also as an important transit channel for shipping despite intense competition. However, continuous efforts are required to stay ahead of competition and make use of growing Latin America trade to build its market share and further solidify its market position.Bachelor of Science (Maritime Studies