Panama Canal

A schematic of the Panama Canal, illustrating the sequence of locks and passages

The Panama Canal is a man-made canal which joins the Atlantic and Pacific oceans. One of the largest and most difficult engineering projects ever undertaken, it had an enormous impact on shipping between the two oceans, replacing the long and treacherous route via the Drake Passage and Cape Horn at the southernmost tip of South America. A ship sailing from New York to San Francisco via the canal travels 9,500 KM (6,000 miles), well under half the 22,500 km (14,000 mile) route around Cape Horn. Although the concept of a canal near Panama dates back to the early 16th century, the first attempt to construct a canal began in 1880 under French leadership. After this attempt failed and saw 21,900 workers die, the project of building a canal was attempted and completed by the United States in the early 1900s, with the canal opening in 1914. The building of the 77 km (48 mile) canal was plagued by problems, including disease (particularly malaria and yellow fever) and landslides. By the time the canal was completed, a total of 27,500 workmen are estimated to have died in the French and American efforts.

Since opening, the canal has been enormously successful, and continues to be a key conduit for international maritime trade. The canal can accommodate vessels from small private yachts up to large commercial vessels. The maximum size of vessel that can use the canal is known as Panamax; an increasing number of modern ships exceed this limit, and are known as post-Panamax or super-Panamax vessels. A typical passage through the canal by a cargo ship takes approximately 8-10 hours. In fiscal year 2008, 14,702 vessels passed through the waterway with a total 309.6 million Panama Canal/Universal Measurement System (PC/UMS) tons.

While the Pacific Ocean is west of the isthmus and the Atlantic to the east, the journey through the canal from the Pacific to the Atlantic is one from southeast to northwest. This is a result of the isthmus's "curving back on itself" in the region of the canal. The Bridge of the Americas at the Pacific end is about a third of a degree of longitude east of the end near Colon on the Atlantic.


Early efforts

The earliest mention of a canal across the Isthmus of Panama dates back to 1534 when Charles V, Holy Roman Emperor and King of Spain ordered a survey for a route through Panama that would ease the voyage for ships traveling to and from Spain and Peru, as well as give the Spanish a tactical military edge over the Portuguese. During his expedition of 1788–1793, Alessandro Malaspina demonstrated the feasibility of a canal and outlined plans for its construction.

Given the strategic situation of Panama and its narrow isthmus separating two great oceans, other forms of trade links were attempted over the years. The ill-fated Darien scheme was an attempt launched by the Kingdom of Scotland in 1698 to set up an overland trade route, but was defeated by the generally inhospitable conditions, and abandoned two years later in 1700. Finally, the Panama Railway was built across the isthmus, opening in 1855. This overland link became a vital piece of infrastructure, greatly facilitating trade and largely determining the later canal route.

Construction work on the Gaillard Cut is shown in this photograph from 1907

An all-water route between the oceans was still seen as the ideal solution, and the idea of a canal was enhanced by the success of the Suez Canal. The French, under Ferdinand de Lesseps, began construction on a sea-level canal (i.e., without locks) through what was then Colombia's province of Panama, on January 1, 1880. The French began work in a rush with insufficient prior study of the geology and hydrology of the region. In addition, disease, particularly malaria and yellow fever, sickened and killed vast numbers of employees, ranging from laborers to top directors of the French company. Public health measures were ineffective because the role of the mosquito as a disease vector was then unknown. These conditions made it impossible to maintain an experienced work force as fearful technical employees quickly returned to France. Even the hospitals contributed to the problem, unwittingly providing breeding places for mosquitoes inside the unscreened wards. Actual conditions were hushed-up in France to avoid recruitment problems. In 1893, after a great deal of work, the French scheme was abandoned due to disease and the sheer difficulty of building a sea-level canal, as well as lack of French field experience, such as downpours causing steel equipment to rust. The high toll from disease was one of the major factors in the failure; as many as 22,000 workers were estimated to have died during the main period of French construction (1881–1889).

According to Stephen Kinzer's 2006 book Overthrow, in 1898 the chief of the French Canal Syndicate (a group that owned large swathes of land across Panama), Philippe Bunau-Varilla, hired William Nelson Cromwell (of the US law firm Sullivan & Cromwell) to lobby the US Congress to build a canal across Panama, and not across Nicaragua.

Later efforts

In 1902, Cromwell noticed a 10-cent Nicaraguan postal stamp, produced by the United States’ American Bank Note Company, which erroneously depicted a fuming Momotombo volcano. Momotombo was nearly dormant and stands more than 160 km (100 miles) from the proposed Nicaraguan canal path; yet the stamp had taken advantage of a particularly volcanic year in the Caribbean. Cromwell planted a story in the New York Sun reporting that the Momotombo volcano had erupted and caused a series of seismic shocks. Thereafter he sent leaflets with the above stamps pasted on them to all U.S. Senators as witness to the volcanic activity in Nicaragua. On June 19, 1902, three days after senators received the stamps, they voted for the Panama route for the canal. For his lobbying efforts, Cromwell received the sum of $800,000.

On November 18, 1903, the Hay-Herran Treaty was signed between Colombia and the United States. It would have granted the United States a 99-year lease from Colombia on the land proposed for the canal, but the Senate of Colombia did not ratify the treaty. President of the United States Theodore Roosevelt changed tactics, inciting a minority of Conservative Panamanian landholding families to demand independence from Colombia. Panama achieved independence on November 3rd, 1903 when the United States sent naval forces to encourage Colombia's surrender of the region. In November 1903, Phillipe Bunau-Varilla, Panama's ambassador to the United States, signed the Hay-Bunau Varilla Treaty, granting rights to the United States to build and indefinitely administer the Panama Canal. Although Bunau-Varilla was serving as Panama's ambassador, he was a French citizen and was not authorized to sign treaties on behalf of Panama without Panamanian review.[citation needed] This treaty became a contentious diplomatic issue between the two countries, culminating in riots in which 21 Panamanians and 4 U.S. soldiers were killed on Martyr's Day, January 9, 1964. The issues were resolved with the signing of the Torrijos-Carter Treaties in 1977, which returned the former Canal Zone territories to Panama.

The United States, under President Theodore Roosevelt (with John Frank Stevens as Chief Engineer from 1905–1907), bought out the French equipment and excavations for US$40 million and began work on May 4, 1904. The United States paid Colombia $25,000,000 in 1921, seven years after completion of the canal, for redress of President Roosevelt's role in the creation of Panama, and Colombia recognized Panama under the terms of the Thomson-Urrutia Treaty.

Chief Engineer (1905–1907), John Frank Stevens' primary achievement in Panama was in building the infrastructure necessary to complete the canal. He rebuilt the Panama Railway and devised a system for disposing of soil from the excavations by rail. He also built proper housing for canal workers and oversaw extensive sanitation and mosquito-control programmes that eliminated yellow fever and other diseases from the Isthmus. Stevens argued the case against a sea level canal like the French had tried to build. He successfully convinced Theodore Roosevelt of the necessity of a canal built with dams and locks.

A significant investment was made in eliminating disease from the area, particularly yellow fever and malaria, the causes of which had originally been theorized by Cuban physician/scientist Dr. Carlos Finlay in 1881 who had identified the mosquito as the vector that causes the disease. Finlay's theory and investigative work had recently been confirmed by Dr. Walter Reed while in Cuba with U.S. Army motivation during the Spanish-American War (see Health measures during the construction of the Panama Canal). With the diseases under control, and after significant work on preparing the infrastructure, construction of an elevated canal with locks began in earnest and was finally possible. The Americans also gradually replaced the old French equipment with machinery designed for a larger scale of work (such as the giant hydraulic crushers supplied by the Joshua Hendy Iron Works), to quicken the pace of construction. President Roosevelt had the former French machinery minted into medals for all workers who spent at least two years on the construction to commemorate their contribution to the building of the canal. These medals featured Roosevelt's likeness on the front, the name of the recipient on one side, and the worker's years of service, as well as a picture of the Culebra Cut on the back.

In 1907 Roosevelt appointed George Washington Goethals as Chief Engineer of the Panama Canal. The building of the canal was completed in 1914, two years ahead of the target date of June 1, 1916. The canal was formally opened on August 15, 1914 with the passage of the cargo ship Ancon. Coincidentally, this was also the same month that fighting in World War I (the Great War) began in Europe. The advances in hygiene resulted in a relatively low death toll during the American construction; still, 5,609 workers died during this period (1904–1914). This brought the total death toll for the construction of the canal to around 27,500.

By the 1930s it was seen that water supply would be an issue for the canal; this prompted the building of the Madden Dam across the Chagres River above Gatun Lake. The dam, completed in 1935, created Madden Lake (later Alajuela Lake), which acts as additional water storage for the canal. In 1939, construction began on a further major improvement: a new set of locks for the canal, large enough to carry the larger warships which the United States was building at the time and had planned to continue building. The work proceeded for several years, and significant excavation was carried out on the new approach channels, but the project was canceled after World War II.

Construction of locks on the Panama Canal, 1913

After the war, U.S. control of the canal and the Canal Zone surrounding it became contentious as relations between Panama and the U.S. became increasingly tense. Many Panamanians felt that the canal zone rightfully belonged to Panama; student protests were met by the fencing in of the zone and an increased military presence. Negotiations toward a new settlement began in 1974, and resulted in the Torrijos-Carter Treaties. Signed by President of the United States Jimmy Carter and Omar Torrijos of Panama on September 7, 1977, this mobilized the process of granting the Panamanians free control of the Canal so long as Panama signed a treaty guaranteeing the permanent neutrality of the Canal. The treaty led to full Panamanian control effective at noon on December 31, 1999, and the Panama Canal Authority (ACP) assumed command of the waterway.

Before this handover, the government of Panama held an international bid to negotiate a 25-year contract for operation of the container shipping ports located at the Canal’s Atlantic and Pacific outlets. The contract was not affiliated with the ACP or Panama Canal operations, was won by the firm Hutchison Whampoa, a Hong Kong-based shipping concern whose owner is Li Ka Shing.

USS Missouri passes through the canal


The canal consists of artificial lakes, several improved and artificial channels, and three sets of locks. An additional artificial lake, Alajuela Lake (known during the American era as Madden Lake), acts as a reservoir for the canal. The layout of the canal as seen by a ship passing from the Pacific end to the Atlantic is as follows:

  • From the buoyed entrance channel in the Gulf of Panama (Pacific side), ships travel 13.2 km (8.2 mi) up the channel to the Miraflores locks, passing under the Bridge of the Americas
  • The two-stage Miraflores lock system, including the approach wall, is 1.7 kilometers (1.1 mi) long, with a total lift of 16.5 meters (54 ft) at mid-tide
  • The artificial Miraflores Lake is the next stage, 1.7 kilometers (1.0 mi) long, and 16.5 meters (54 ft) above sea level
  • The single-stage Pedro Miguel lock, which is 1.4 kilometers (0.8 mi) long, is the last part of the ascent with a lift of 9.5 meters (31 ft) up to the main level of the canal
  • The Gaillard (Culebra) Cut slices 12.6 kilometers (7.8 mi) through the continental divide at an altitude of 26 meters (85 ft), and passes under the Centennial Bridge
  • The Chagres River (el Río Chagres), a natural waterway enhanced by the damming of Lake Gatún, runs west about 8.5 kilometers (5.3 mi), merging into Lake Gatun
  • Gatun Lake, an artificial lake formed by the building of the Gatun Dam, carries vessels 24.2 kilometers (15.0 mi) across the isthmus
  • The Gatún locks, a three-stage flight of locks 1.9 kilometers (1.2 mi) long, drop ships back down to sea level
  • A 3.2 kilometer (2.0 mi) channel forms the approach to the locks from the Atlantic side
  • Limón Bay (Bahía Limón), a huge natural harbour, provides an anchorage for some ships awaiting passage, and runs 8.7 kilometers (5.4 mi) to the outer breakwater

Canal lock size

Mitre lock gate at Gatun

Initially the locks at Gatun had been designed as 28.5 meters (94 ft) wide. In 1908 the United States Navy requested that the locks should be increased to have a width of at least 36 meters (120 ft) which would allow for the passage of US naval ships. Eventually a compromise was made and the locks were to be constructed to a width of 33.53 meters (110.0 ft). Each lock is 304.8 meters (1,000 ft) long with the walls ranging in thickness from 15 meters (49 ft) at the base to 3 meters (9.8 ft) at the top. The central wall between the parallel locks at Gatun has a thickness of 18 meters (59 ft) and stands in excess of 24 meters (79 ft) in height. The lock gates are made from steel and measure an average of 2 meters (6.6 ft) thick, 19.5 meters (64 ft) in length and 20 meters (66 ft) in height.[18] It is the size of the locks, specifically the Pedro Miguel Locks, along with the height of the Bridge of the Americas at Balboa, that determine the Panamax metric and limit the size of ships that may use the Canal.


Tolls for the canal are decided by the Panama Canal Authority and are based on vessel type, size, and the type of cargo carried.

For container ships, the toll is assessed per the ship's capacity expressed in twenty-foot equivalent units or TEUs. One TEU is the size of a container measuring 20 feet (6 m) by 8 feet (2 m) by 8.5 feet (3 m). Effective May 1, 2009, this toll is US$57.60 per TEU. A Panamax container ship may carry up to 4,400 TEU. The toll is calculated differently for passenger ships and for container ships carrying no cargo (“in ballast”).

RORO carriers, such as this one at Miraflores locks, are among the largest ships to use the canal

Passenger vessels in excess of 30,000 tons (PC/UMS), known popularly as "cruise ships", pay a rate based on the number of "berths", that is, the number of passengers that can be accommodated in permanent beds. The per berth charge is $80 for unoccupied berths and $100 for occupied berths. Started in 2007, this has greatly increased tolls for such vessels. Passenger vessels of less than 30,000 tons or with less than 33 tons per passenger are charged on the same "per ton" schedule as freighters.

Most other types of vessel pay a toll per PC/UMS net ton, in which one "ton" is actually a volume of 100 cubic feet (2.8 m³). (The calculation of tonnage for commercial vessels is quite complex.) As of fiscal year 2008, this toll is US$3.90 per ton for the first 10,000 tons, US$3.19 per ton for the next 10,000 tons, and US$3.82 per ton for the next 10,000 tons, and US$3.76 per ton thereafter. As with container ships, a reduced toll is charged for freight ships "in ballast".

Small vessels up to 583 PC/UMS net tons when carrying passengers or cargo, or up to 735 PC/UMS net tons when in ballast, or up to 1,048 fully loaded displacement tons, shall be assessed minimum tolls based upon their length overall, according to the following table:

Canal Tolls
Length of vesselToll (US$)
Up to 15.240 meters (50 ft)500
More than 15.240 meters (50 ft) up to 24.384 meters (80 ft)750
More than 24.384 meters (80 ft) up to 30.480 meters (100 ft)1,000
More than 30.480 meters (100 ft)1,500