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The story and lesson of the Panama Canal


The Panama Canal is located on the territory of Panama, the most southern country of Central America, and is the waterway connecting the Atlantic Ocean and the Great Ocean. Its construction was completed by the USA and the Canal was opened on August 15, 1914. This Channel separates South America and North America.

During the construction of the 77 km long Canal, all kinds of difficulties were encountered, from malaria and yellow fever, to major landslides, and approximately 27,500 Channel employees died in this process.

Today, a ship traveling from New York to San Francisco travels 9,500 km using the Panama Canal, making it much easier compared to the 22,500 km road in the old days, and does not make it necessary to navigate down to Cape Horn.

Since its opening, more than 14,000 ships pass through the Panama Canal every year and the amount of cargo carried reaches 203 million tons.

The journey along the channel takes about 9 hours. In addition, by means of the locking systems that are used to increase and decrease the water level in the channel, the ships are provided to cover distances that are difficult to overcome, which geographical possibilities do not allow.

Panama Canal is 28 meters above sea level. Using the law of balance of liquids, ships are gradually raised in the Canal and lowered to the other side with the same method.

The Panama Canal is the world’s marvel of engineering and is the most expensive Channel. The channel has improved the socioeconomic conditions of the region. The level of welfare of the people of Panama has increased with the Panama Canal. The channel made important contributions to the development of the country.

A widened Panama Canal has been operating since 26 June 2016, with a structural contribution needed, to enable preferability for larger ships and to allow their passages.

Construction of the canal

The first attempt for the Panama Canal was on January 1, 1881. The project was designed as a sea level channel under the leadership of Ferdinand de Lesseps, who built the Suez Canal. De Lesseps gained a global reputation in 1869 for almost alone, creating the Suez Canal, a sea-level waterway connecting the Mediterranean to the Red Sea. In 1879, he agreed to lead the project of building a Panama Canal.

In 1879, Lesseps held an international meeting with prominent technical people from 22 countries to define the most appropriate plan for a “cross-country channel” and to make an initial estimate of the relevant studies. However, the final report and subsequent revisions, the amount of excavation required, and projections about the difficulties of operating in Panama were significantly wrong. The underestimation of the necessary work led to the French company making insufficient capital calculations and lack of resources to finish the job and the project to fail completely.

In the first years of channel construction, the first serious problems started to occur as a result of the lack of organization and the lack of tools to transport the wastes arising from the excavation. Besides all these, great difficulties have been encountered with landslides. In order to prevent landslides, the depth of excavation had to be reduced in certain areas of the Canal.

The French lost more than 20,000 workers and managers to yellow fever, malaria and other diseases. This admits a surprising loss of life in pursuit of a heroic goal. They spent all of their current capital, but they could only setup 30% of the final channel. It even turned out that a sea-level channel was not technically possible, that is, the Suez Canal was not a useful example for the Panama project. The project was declared bankrupt in 1889 and the work stopped for 15 years.

There was a lot of controversy in the US about where the channel should be located and whether a sea-level channel is possible or necessary. Eventually, President Teddy Roosevelt pioneered a decision-making process in Panama that decided to build a lock-based channel that was financed by the United States on the same land that the French had previously failed.

The 10-year American project (1904-1914) finally succeeded due to medical and technology advances not available to the French. The strategies developed to discover the causes of yellow fever and malaria and to effectively eliminate both were much different than conditions 15 years ago. In addition, the advancement of excavations, railways and construction technologies has significantly accelerated progress by showing what the current possibilities are making possible.

Finally, the Panama Canal efforts cost US$ 639 million (an estimated US$ 18 billion by 2020) and took 25,000 lives during its construction. This effort supported and used innovations in machinery, medicine and management. It was opened on August 15, 1914 and became a heroic story of medical and engineering achievements.

When it was done, the channel was an important step in narrowing the world by simplifying global trade.

Three lessons for maritime transport

A very large maritime transport project in this context must be approved by international maritime research and development boards. It is vital that effort and cost estimates include input from many parties and are considered reasonable by all players. Leaders should take every possible step to avoid underestimating the project scope.

Optimism-oriented leadership needs a backup plan. De Lesseps’ leadership philosophy was to proceed only with confidence, without detecting possible technical or physical obstacles and developing solutions. He succeeded in the Suez Canal project because he had to deal with financial difficulties in general. He took advantage of the current technological possibilities that helped to leave the other issues to be handled with time.

The Suez Canal was a great leadership strategy and success. However, he did not keep the same account in Panama, he failed. Maritime transport leaders should know that every project cannot succeed with new technology or foreign aid. They must be sure that they have a backup plan to protect against a project malfunction.

An epic failure can lead to success later. It seemed that there would never be a Panama Canal during the bankruptcy of Panama’s French efforts. The loss of life and money was so great that the task seemed impossible. It was concluded that if a channel can be built, it can be made elsewhere and by someone else.

But the passage of time and lessons from a failure led to a final success. The US government provided financial support to eliminate the problem of financial resources. Extensive design work was undertaken to evaluate different channel options before deciding on a lock-based Panama transition. Technical breakthroughs in medicine and technology were developed and action was taken by the day.

Maritime leaders and the maritime industry must work with IMO to receive adequate IMRB funding through the International Marine Research Fund (IMRF). Multiple different technology options should be evaluated and guided. The industry must activate its technological breakthroughs through various open innovation platforms and processes.

The lessons given by giant projects such as the Panama Canal can be increased by taking the example of today’s issues as a chance of success for the future.