Panama Canal is a passage between the Atlantic Ocean and the Pacific. Since its opening in 1914, the Panama Canal has been a vital trade route. Over a million transits have taken place over the years, with more than 10.3 billion tons of freight moving through. (Brown, 1887). It contributes to 6% of global maritime trade. From 1979 to 1999, the Panama Canal was managed by a joint US–Panamanian administration. The Panamanian government held an international contract before the handover to negotiate a 25-year contract for the operation of the container shipping ports. Panama has a competitive edge as a maritime service provider due to the transportation of containerized freight through the Panama Canal and the provision of auxiliary services. As a result, the country is pushing for more market liberalization in other areas, particularly in freight mobility and unfettered port facilities. The success of the Panama Canal is dependent on its efficiency that means shorter distances reduced shipping costs. the Canal revolutionized international trade by allowing ships to sail directly between the Atlantic and Pacific Oceans. The Panama Canal serves as the principal center for the Pacific-to-Caribbean container terminal system. It is the freight transshipment and redistribution center, supported by the inter-oceanic railway.
The Panamanian government began extending the canal in 2007, with the goal of nearly doubling the existing maximum size of ships that can utilize it and expansion was completed in July 2016. The extension of the Panama Canal will have an influence on marine trade and the routes used to transfer products around the world. Only vessels up to 366 meters long, 49 meters wide, and 15.2 meters deep are permitted to pass through the Panama Canal Authority. Each year, an estimated $270 billion worth of commerce passes through the canal. The expansion of the Panama Canal has had an impact on the Latin American and Caribbean (LAC) areas. It has impacted ports on the East and Gulf coasts of the United States by increasing competition among significant transshipment ports in Panama, Brazil, Jamaica, Mexico, the Bahamas, and the Dominican Republic. Transportation was the most important factor in route selection, followed by travel time, dependability, and route characteristics. The Panama Canal was chosen above the Suez Canal and multimodal possibilities in the United States. The new canal expansion project is considered as a driving force for related businesses that connect canal traffic. It is projected to revolutionize Panama's prospects and significantly increase the country's economic size by allowing mega-vessels to transit via the new locks (Wang, 2017).
Loans from national and multinational financial institutions, as well as development agencies, were used to fund the project. Private investment in the port's surrounding areas has been prompted by Panamax-triggered port growth, including new warehouses and facilities from corporations like Amazon.com. After gigantic new locks were erected at both the Pacific and Atlantic ends of the canal, and waterways were deepened and extended, the ACP will be able to charge more for passage to larger ships.
While the Panama Canal Expansion Project aims to maintain the Panama Canal's dominance as the preferred freight shipping route, its ongoing prominence cannot be assured. The Suez Canal is already used by post-Panamax ships to cross the Atlantic. So there is competition between them. This means that a strategy based on incentives and pricing levels must be devised to attract a growth in the size of the shipping industry in order to justify the project's cost.
The Panama Canal's strategic importance and influence in international trade and global shipping cannot be underestimated.
References
Brown, A. (1887) ‘Panama canal’, Notes and Queries, s7-III(55), p. 49. doi: 10.1093/nq/s7-III.55.49-c.
Wang, M. (2017) ‘The role of Panama Canal in global shipping’, Maritime Business Review, 2(3), pp. 247–260. doi: 10.1108/mabr-07-2017-0014.

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