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Panama and Suez

Monday, June 30, 2014

With an expanded Canal, Panama should be a leader in global logistics, against competition from Suez, as well as other potential alternatives.

Only Suez can take the world’s biggest ships.

But for the next 20 years most of the world's ships will fit in Panama.

In addition, the expanded Canal should be competitive on price, at an operating cost of only about $200 million a year.

Nor is the Suez route perfect.

Pirates infest the Straits of Malacca and the coast of Somalia, through which ships must pass on the route between Asia and the United States.

Egypt, the owner of the Suez Canal, is a potentially unstable country.

Meanwhile, little more than a Chinese bluff is behind plans for several dry canals – two in Central America and one in Mexico – which would connect the Atlantic and Pacific Oceans.

A dry canal is inefficient.

It would take a week or more to unload containers from a big ship, carry them by rail to the other coast, and load them on another big ship.

But simply talking about a strategic asset 1,000 kilometers from Miami could send a message to the United States, which wants to isolate China, by building alliances among Japan, Korea, Philippines, Indonesia and Vietnam.

That leaves a potential Nicaraguan waterway – if it can be built.

The flat part of Nicaragua is mainly swampland, which would seep back into the canal.

Also, the canal would have to lift giant ships over 33-meter hills – 110 feet – higher than any point of the Panama Canal.