By David Gambrel
No longer are the dimensions of the Panama Canal acceptable for modern ships and shipping practices. The Panama Canal is being expanded to accommodate much larger vessels. The primary reason for expanding the Panama Canal is to improve container traffic, and to make it cheaper to do so. However, expanding the Canal should also reduce shipping costs for coal shippers, provided Capesize vessels can be loaded at origin and unloaded at destination.
It has been estimated that the New Panamax container vessels will be able to carry at least twice as many containers as Panamax vessels. Generally speaking, this means the freight rates will be cut in half. If the current rate from a Pacific Rim country is $50/metric ton, this means the New Panamax rate should be on the order of $25/metric ton.
What is the attraction of the expanded Panama Canal for coal companies? Basically, the expanded Canal opens the Pacific Rim coal consuming market to North American and South American coal producers on a competitive basis. In 2011, only 10.5 million metric tons (mt), or about 200 vessels, passed through the Panama Canal from Gulf to Pacific. To a very great extent Atlantic and Gulf coal origins have not crossed into Pacific markets, and the reverse is true for Pacific origins. Cutting freight rates in half should enable a greater competitiveness, particularly from U.S. Gulf origins to Pacific Rim countries.
It is also true that coal has moved through the Canal from Pacific to Gulf. In 2011, a total of 3.7 million mt went through the Canal in this direction, most likely originating in one of the two British Columbia ports. This amounts to about 70 Panamax vessels in a year’s time, not a significant number. It is possible the completion of the Canal expansion will open new Atlantic markets for Canada.
At the origin end Puerto Bolivar, Colombia, is capable of loading Capesize vessels with coal from the enormous El Cerrejon mine. In North America, several coal terminals have Capesize capability: United Bulk Terminal, Lower Mississippi River; International Marine Terminal, Lower Mississippi River; McDuffie Terminal, Mobile, Ala.; Lambert’s Point Terminal, Norfolk, Va.; Dominion Terminal, Hampton Roads, Va.; CSX Terminal, Baltimore, Md.; and Consolidation Terminal-Baltimore, Md. It should be noted that while numerous locations on the Lower Mississippi River have deep enough water for loading Capesize vessels, the choke point is the dredged depth of Southwest Pass, the outlet to the Gulf of Mexico.
At the discharge end there are quite a few terminals capable of handling Capesize vessels. A partial list is Dalian, China; Qingdao, China; Vizag, India; Mundra, India; Kimitsu, Japan; and Keihin, Japan. The Japanese terminals are but a few of those owned and used by steel companies, and are therefore used for metallurgical coal. It is generally true that the deepest receiving terminals in any country are those associated with metallurgical coal, because they are primarily sited and designed for the gigantic iron ore vessels.
A vessel leaving McDuffie Terminal in the Port of Mobile, Ala., will travel 9,908 nautical miles to the Port of Dalian, China. A vessel leaving the Port of Brisbane, Australia, will only travel 4,460 nautical miles to the same port. Australian vessels have always had the advantage of distance, and in many cases have also had the advantage of vessel size. They could ship coal in Capesize vessels, which frequently cost half the amount per ton hauled. The distance advantage will remain, but the vessel size advantage will disappear with the completion of the Panama Canal expansion.
Zurich North America is providing the surety bond to the consortium responsible for the construction of the $5.25 billion expansion of the Panama Canal—one of the largest civil construction projects ever undertaken. The multinational consortium of contractors—Sacyr Vallehermoso (Spain), Impregilo (Italy), Jan de Nul (Belgium) and Constructora Urbana (Panama)—is charged with building three locks parallel to the older, existing locks, to allow for today’s larger ships. The new locks will have a length of 1,400 ft, a width of 180 ft, and a depth of 60 ft, compared to the old locks which are 965 ft length, 110 ft width, and 42 ft depth. The project was originally scheduled for completion in 2014, to coincide with the 100th anniversary of the Canal’s opening, but unforeseen problems have caused that date to be in question.
The length of the Panama Canal is approximately 51 miles. A trip along the Canal from its Atlantic entrance goes through a 7 mile dredged channel in Limón Bay. The Canal then proceeds for a distance of 11.5 miles to the Gatun Locks. This series of three locks raise ships 26 m to Gatun Lake. It continues south through a channel in Gatun Lake for 32 miles to Gamboa, where the Culebra Cut begins. This channel through the cut is 8 miles long and 150 m wide. At the end of this cut are the locks at Pedro Miguel. The Pedro Miguel locks lower ships 9.4 m to a lake which goes to the Miraflores Locks, which lower ships 16 m to sea level at the Canal’s Pacific terminus in the Bay of Panama.
The Canal today has two lanes each with its own set of locks. The expansion plan consists of adding a third lane through the construction of lock complexes at each end of the Canal. One lock complex will be located on the Pacific side to the southwest of the existing Miraflores Locks. The other complex will be located to the east of the existing Gatun Locks. Each of these new lock complexes will have three consecutive chambers designed to lift vessels from sea level to the level of Gatun Lake and back down again. In effect a vessel of any size will have to climb a hill of 26 m and go back down again.
Each chamber will have three lateral water-saving basins, for a total of nine basins per lock and 18 basins total. Just like the existing locks, the new locks and their basins will be filled and emptied by gravity, without the use of pumps. The location of the new locks uses a significant portion of the area excavated by the United States in 1939 and suspended in 1942 because of World War II. The new locks will be connected to the existing channel system through new navigational channels.
The new lock chambers will use rolling gates instead of miter gates, which are used by the existing locks. Rolling gates are used in almost all existing locks with dimensions similar to those being proposed, and are a well-proven technology. The new locks will use tugboats to position the vessels instead of locomotives. As in the case of the rolling gates, tugs are successfully and widely used for these purposes in locks of similar dimensions.
MWH is the lead designer of the new Post-Panamax navigation locks for the Third Set of Locks Project of the Panama Canal Expansion. The third set of locks will double the Canal’s capacity, providing significant benefits to the local, regional and global economies. The design-build contract for implementation of the third set of locks project was awarded by the Panama Canal Authority to international consortium Grupo Unidos Por el Canal (GUPC) in July 2009. Providing support to GUPC for design, MWH is the lead firm of the design joint venture, CICP Consultores Internacionales, LLC, in partnership with California-based TetraTech and Iv-Infra of the Netherlands. Lock design specialists intend to deliver a system enabling efficient operation with minimal water consumption, all within the stringent technical requirements and specifications. Examples of MWH high-value, reliable design solutions include:
- Lock walls: The cost-effective lock wall designs incorporate foundation drains that reduce the hydrostatic and hydrodynamic loads, enabling more efficient structures that achieve the performance goals for strength and durability.
- Seismic design: Using state-of-the-art seismic analysis techniques, MWH is developing lock wall configurations that meet stringent seismic criteria at minimum cost.
- Water consumption: Water saving basins—the largest in the world—are designed to reuse 60% of the fresh water consumed for lockages, with an optimized filling and emptying system that meets aggressive performance criteria for system efficiency and throughput.
- Integrated operations and controls: Through optimum design of operational features and control systems, lock operations will be seamless and efficient. Design of the lock operating gates for rapid opening and closing, coupled with an efficient filling and emptying system based on innovative hydraulic design and state-of-practice control technologies, system state-of-practice control technologies, system safety, efficiency and throughput are maximized.
The $3.12 billion Third Set of Locks Project will double the capacity of the Canal. As of April 30, 2012, this portion of the Canal expansion was 22% complete. The locks are now on track to be flooded in September, and pre-commissioning tests should go forward in April 2015.
David Gambrel is a coal transportation consultant and writer. He may be contacted at email@example.com.