• The lifeblood of Panama and the global trade.
• Global Leader in maritime industry services.
• Foundation of the global trade and transport practices. • An eminent structure of innovation, reliability, and visibility. A NEW ERA AHEAD
The Panama Canal (Figure 2.5) is roughly 50 miles (80 kilometers) long along the Atlantic and Pacific oceans. This seaway is a passage across the Continental Divide, that is, an isthmus that connects North and South America. The canal utilizes an efficient system of locks, that is, chambers with entry and exit gates. The locks serve as water lifts that raise vessels to 81.3 feet (26 meters) from ocean level to the Gatun Lake level.
The Panama Canal’s history extends back virtually to the first explorers of the American continent. Upon the end of the 19th century, scientific innovations and the need for global sea transport induced the canal’s construction.
The Hay–Pauncefote Treaty signed in November 1901 stipulated England’s consent for the United States to construct and operate the canal. In 1902, US President Roosevelt paid $40 million for the legal rights to the Panama concession. The Republic of Panama was established in 1903 pursuant to its separation from Colombia. The Panama Canal’s construction was concluded in 1913 and officially launched in 1914 (see Figure 2.6a and b).
FIGURE 2.5 Dry bulker transiting south toward Pedro Miguel Locks. (Courtesy of the
The water utilized to elevate and lower ships in every single lock originates from the Gatun Lake by gravitational pressure; it arrives to the locks via a mechanism of major culverts that expand beneath the lock chambers through the sidewalls and the center wall. The Panama Canal Expansion Program is a planned state-of-the-art technological marvel with 3 million cubic meters of concrete used in the construction of the new lock processes for the Expansion Program. The significance of the Panama Canal’s expansion in global trade and transport can hardly be exaggerated, as more enticing, optimum services will not be found elsewhere.
With a total manpower of roughly 10,000 people and 24/7 operations through- out the year, the Canal is the lifeblood of Panama and the Americas. Figures 2.7 through 2.12 illustrate additional features, and forthcoming features, of the canal.
Water-saving basin system
The locks will have more efficient, easier to service rolling gates.
The water-saving basins will enable using 7% less water than the existing lock system and reusing 60% of the water required for each transit.
3 2 1
Valves
: Moves by gravity to water-saving basins for use in the following lockage. : It equalizes and moves to the next chamber and eventually to sea. and
and
1,2, 3
4 5
FIGURE 2.7 The canal’s water-saving basin system explained. (Courtesy of the
Panama Canal.)
(a) (b)
FIGURE 2.6 Historical photos of the canal’s construction and in use. (Courtesy of
Existing locks New locks
Vessels up to 4400 TEUs Vessels up to 13,00014,000 TEUs
Rolling gates will ease gate maintenance A B 33.5 m 4400 TEU 13,00014,000 TEU 304.8 m 12.8 m min. 18.3 m min. 12.04 m 55 m 15.2 m 366 m 427 m 49 m 294.1 m 32.3 m (a) New locks Vessels up to 13,00014,000 TEUs Rolling gates will ease
gate maintenance 366 m 49 m 427 m 18.3 m min. 13,00014,000 TEU 15.2 m 55 m (b)
FIGURE 2.8 The existing locking system and the new locking system. (a) Existing
locks: vessels up to 4400 TEUs; (b) new locks: vessels up to 13,000–14,000 TEUs. (Courtesy of the Panama Canal.)
30 m measurementsMain culvert
6.5 m
55 m are wide enough to allowThese massive culverts the transit of two railroads
8.3 m Auxiliary culvert Main culvert Ports Lock chamber
FIGURE 2.9 A profile of the new lock chamber and lateral culverts. (Courtesy of
Gate control
tower Lockheads
Gate 2 Gate 1
FIGURE 2.10 The Rolling Gate recess. (Courtesy of the Panama Canal.)
(b) (a)
FIGURE 2.11 A rendering of the third set of locks on the Atlantic side looking north
and a rendering of third set of locks on the Pacific side looking north. (a) Rendering: Third set of locks on the Atlantic side looking north. (b) Rendering: Third set of locks on the Pacific side looking north. (Courtesy of the Panama Canal.)
is, at a time when the Arctic opening to sea trade will be another attractive alternative for certain global routes.
As an antipode, the Suez Canal has no easy alternatives. In 1961, the Israeli Government designed an overland Suez Canal deviation by an Israeli company, trans- porting Japanese goods to Eilat, Israel’s Free Trade Zone, and move them overland to Haifa for further transshipment to its final discharging node, in Italy (JTA 1961). The inland option is frequently an attractive alternative, yet seaports, owing to the ships’ economies of scale, achieved by size and low cost of fuel, so far exceed any train or truck alternative.
On the basis of this presumption, the likely region for a future canal to be built con- necting Eastern Europe and the Middle East would have to pass through Israel, Syria, Iraq, Iran, or Turkey. The fragile political climate in the region for a number of years now would not encourage such a risky endeavor. This brings us to the other alternative: when the Suez Canal closed in 1973 during the Yom Kippur War (5 days war), ships’ only other alternative was to navigate around Africa, resulting in significant global supply chain disruptions, time lost, and fuel oil consumption. This offered Durban and other South
FIGURE 2.12 An overview of the canal expansion program. (Courtesy of the
African ports a great advantage, as they were used as bunkering ports, as well as repairs and replenishment stations.
The above case studies have taught us that the maritime industry evolves and discov- ers new alternatives for geography, and all the factors of production.
One of the more significant findings to emerge from this section is that in a rapidly growing and changing global trade, ports are still bound by geographical restrictions, yet it is other factors such as cost, time, and quality that may contribute to the change of trade routes. Technology seems to have outgrown geography, as IT and advanced satellite telecommunications have eliminated distances. A port’s geopolitical significance may be permanent, that is, a nation’s location, or temporary: depending on supply and demand fluctuations. A port’s significance is also related to the regional factors of production and trade agreements that determine the country’s trade growth and trade balance (import/ export ratio).
The next section will examine the principal factors that affect a supply chain and the role of ports in different network formations and will seek for solutions.
2.3 SUPPLY CHAIN OPPORTUNITIES, COMPETITION, AND CONFLICT PREVENTION
This section highlights the changing role of ports and port managers as supply chains and global trade change. The three fundamental issues to be addressed are as follows: first, in which manner did the logistics networks and nodal connection affect the global maritime industry? Second, who are the new industry’s key players within this redefined industry? And third, how can ports eliminate conflict and competition and benefit from the industry’s opportunities?
The significance of port connectivity became magnified over the past few years, when globalization and outsourcing required the transport of large sea trade volumes throughout expanded global sea routes. According to the latest UNCTAD annual sta- tistics (2012), the world cargo volume has almost doubled in 13 years, that is, from 27 billion in cargo ton-miles in 1999 to over 45 billion in cargo ton-miles in 2012. Ninety percent of this cargo involves sea trade, which means that the world’s 2000 seaports, 10,000 terminals, and 50,000 ships were employed to accommodate this trade growth. With the globalization of cargoes and markets, modern ports needed to restructure their operations and networking systems, in order to enhance connectivity throughout their supply chain associates. Although the focal point of supply chains remains the reliable transportation and distribution from the ports to the markets, the new supply chain net- works became more complex and lengthy in processes.
Designated transshipment hub ports have been developed owing to an increasing demand for gateway ports (OECD 2008). As of 2013, at least a quarter of the world’s largest ports serve as transshipment hubs, whereas most of the global hub ports’ con- tainer throughput is being distributed as transshipment. The following is a case study of Gulf Winds International Inc., a typical third-party logistics company serving global cargoes in Texas, USA.
Furthermore, larger ship sizes such as Maersk’s Triple E type aim to achieve econo- mies of scale on behalf of the shipowners, which also suggests that less global ports will be used to serve the most profitable trade routes. This will eventually lead to fewer global ports of call, the concentration of cargoes in fewer, selected regions, and increased com- petition among domestic ports.
CASE STUDY: GULF WINDS INTERNATIONAL