⚓ Panama Canal

Major Canal
82 kmTotal length
14,000+Transits per year
6%World maritime trade
LocksSystem (3 sets)

Overview: The Engineering Marvel of the Americas

The Panama Canal is an 82-kilometer artificial waterway in Panama, Central America, connecting the Atlantic Ocean (via the Caribbean Sea) and the Pacific Ocean. It is one of the greatest engineering achievements in history and handles approximately 6% of world maritime trade, serving as the vital link for shipping between the eastern and western hemispheres.

Engineering Achievement: Unlike the Suez Canal, the Panama Canal requires a sophisticated system of three sets of locks that raise and lower ships approximately 26 meters to cross the continental divide. Freshwater from Gatún Lake (an artificial lake created for the canal) fills each lock chamber — no pumps required, only gravity. The 2016 expansion added a third, larger set of locks, transforming global container shipping economics.

The canal cuts through the narrowest point of the American landmass, reducing the journey between New York and San Francisco from ~22,500 km (around Cape Horn) to just ~9,500 km — a saving of nearly 13,000 km. It is operated by the Panama Canal Authority (ACP), a Panamanian government agency since full control was transferred from the USA in 1999.

Route & Key Structures

  • Atlantic entrance: Colón (Caribbean Sea)
  • Pacific entrance: Panama City (Gulf of Panama)
  • Gatún Locks: Three-step lift on Atlantic side; raises ships 26 m
  • Gatún Lake: Artificial freshwater lake; 26 m above sea level
  • Culebra Cut (Gaillard Cut): 13.7 km channel through the continental divide
  • Pedro Miguel Locks: One-step descent on Pacific side
  • Miraflores Locks: Two-step final descent to Pacific
  • Agua Clara Locks: New third-lane locks (2016 expansion) on Atlantic side
  • Cocoli Locks: New third-lane locks (2016 expansion) on Pacific side

Physical Dimensions

  • Total length: 82 km
  • Original lock chamber: 305 m × 33.5 m × 12.5 m draft
  • New (Neo-Panamax) locks: 427 m × 55 m × 18.3 m draft
  • Water elevation: 26 meters above sea level at Gatún Lake
  • Transit time: 8–10 hours (full transit)

Panamax & Neo-Panamax: Vessel Size Classes

The Panama Canal has defined two of the most important vessel size classifications in world shipping history.

Panamax (Original Locks)

  • Maximum length: 294 m
  • Maximum beam: 32.3 m
  • Maximum draft: 12 m
  • Maximum container capacity: ~5,000 TEU
  • Still widely used — many vessels built specifically to these dimensions
  • Original locks: 305 m × 33.5 m chamber

Neo-Panamax (Expanded Locks — 2016)

  • Maximum length: 366 m
  • Maximum beam: 51.25 m
  • Maximum draft: 15.2 m
  • Maximum container capacity: ~14,000–15,000 TEU
  • New lock chambers: 427 m × 55 m
  • Transformed the economics of Asia–US East Coast trade
  • US East Coast ports had to dredge harbors to accommodate Neo-Panamax

Post-Panamax Impact: Before the 2016 expansion, large container ships (Post-Panamax) were forced to use the Suez Canal for Asia–US East Coast routes. After expansion, vessels up to ~14,000 TEU can now transit Panama, reshaping trade lane economics and causing a boom in US East Coast port investment.

Canal Fees & Revenue

  • Fees based on vessel type, size (PC/UMS tons), and cargo
  • Container ship fee: $450,000–$800,000 per transit (varies by size)
  • Total annual ACP revenue: approximately $4–5 billion
  • Contributes ~5% of Panama's GDP
  • Water level-dependent: 2023 drought forced vessel weight restrictions, reducing revenue

Drought Crisis (2023–2024)

Water Crisis: In 2023, severe drought caused Gatún Lake water levels to fall to historically low levels. The ACP was forced to restrict daily vessel transits from ~36 to as few as 18 per day, and imposed strict draft restrictions. Ships faced weeks-long queues and some were forced to reroute via Suez. This highlighted the canal's critical vulnerability to climate change.

Top Trade Routes via Panama

  • US East Coast ↔ Asia: Largest single route category
  • US East Coast ↔ South America (Pacific coast): Chile, Peru, Ecuador
  • Europe ↔ US West Coast / Asia Pacific
  • LNG exports: US Gulf LNG → Asia (rapidly growing)
  • Grain: US Gulf/East Coast → Asia
  • Bulk carriers: Coal, grain, minerals between Atlantic and Pacific

History & Operations

Historical Timeline

  • 1534: Spanish King Charles V first proposes a canal
  • 1881–1889: French attempt under Ferdinand de Lesseps fails (yellow fever, engineering)
  • 1904–1914: USA builds canal; 10 years, 75,000 workers
  • 1914: Canal opens; first transit by SS Ancon on August 15
  • 1977: Torrijos-Carter Treaties signed; Panama to gain control
  • 1999: Full control transferred to Panama Canal Authority
  • 2007–2016: Third set of locks expansion project
  • 2016: Expanded canal inaugurated (Neo-Panamax era begins)
  • 2023–2024: Drought crisis; restricted transits

Water Management

  • Each lock transit requires ~197 million liters of freshwater (gravity-fed)
  • Water comes from Gatún Lake fed by tropical rainfall
  • New locks have water-saving basins (recycle 60% of water per transit)
  • Climate change and deforestation threaten long-term freshwater supply
  • ACP invests heavily in watershed conservation

Economic Importance to Panama

  • Canal contributes ~5% of Panama's GDP directly
  • Colón Free Trade Zone: second largest in the world
  • Panama City is a major financial and logistics hub for the Americas
  • Hub for ship registration (Panama is world's largest flag state by fleet)

Live Vessel Traffic

Real-time ship positions at the Panama Canal and surrounding waters.

Data provided by VesselFinder AIS tracking system

Quick Facts

  • TypeMajor Canal
  • CountryPanama
  • OpenedAugust 15, 1914
  • Length82 km (51 miles)
  • Lock Sets3 (original) + 2 (new)
  • Max Elevation26 m (Gatún Lake)
  • Annual Transits14,000+
  • World Trade Share~6%
  • Transit Time8–10 hours
  • Annual Revenue~$4–5 billion
  • OperatorPanama Canal Authority
  • Expansion Year2016 (Neo-Panamax)
  • Max Neo-Panamax TEU~14,000–15,000 TEU

Vessel Size Classes

  • Panamax Max Beam32.3 m
  • Panamax Max TEU~5,000 TEU
  • Neo-Panamax Beam51.25 m
  • Neo-Panamax TEU~14,000–15,000 TEU