The recent crisis with the grounded container ship in the Suez Canal was something that made many Panamanians become instantly grateful and then reflective. Of course, a tragedy like the giant container ship getting stuck for six days is something that could happen here, but the bottom line is that it hasn’t and it certainly isn’t likely. Like that pink Energizer Bunny seen on American television, Panama just keeps going and going and it’s not all about luck!
The Panama Canal has been forced to close only two times–once for a day in 1989 when the United States invaded Panama to depose the defacto dictator Manuel Noriega and for 17 hours in 2010 when the isthmus was hit with extremely heavy rains and flooding. Otherwise, seven days a week, 24-hours a day, 365 days a year the Panama Canal welcomes ships and then safely sends them on their way. Even the recent global pandemic didn’t close the Panama Canal because immediate and strict rules were successfully implemented.
Political Unrest Is Threatening
The other three major trade routes–the Suez Canal, the Strait of Hormuz, and the Malacca Strait–have experienced everything from grounded vessels, sabotaged ships, volatile weather, and political unrest. There have been many stoppages, including one for eight years at the Suez Canal because of war. The Suez and Hormuz have not been able to maintain stability as their locations in the Middle East are unfortunate considering ongoing political tensions. Ships take on added insurance and costs when traversing those routes.
The Malacca Strait is certainly the most secure of the other three but at its smallest point, the waterway is only 2.7 kilometers wide, creating a natural bottleneck, as well as the potential for collisions, grounding, or oil spills. The fact India can easily block the strait with a few well-placed ships continuously threatens China since the passageway carries 16 million barrels of oil and 80% of China’s crude oil imports.
No Violent Weather!
Panama not only enjoys political peace, in part because they are a protectorate of the United States, but the country is geographically situated so the threat of earthquakes, volcanoes, and hurricanes do not exist. Hurricanes cannot form that close to the equator and Panama’s only volcano is so inactive a whole town now lives inside the crater.
Initially, the grounding of the Ever Given was blamed on strong winds, a sandstorm, and one of the hottest months of March on record. The Malacca Strait is always concerned about the ever-increasing typhoons and global warming in Southeast Asia.
What Does Closing A Canal Actually Mean?
Closing any of the major canals, including the Suez Canal, the Strait of Hormuz, Malacca Strait, or the Panama Canal world have far-reaching ramifications globally. Millions of dollars were lost while the stricken ship Ever Given was being dug out of the Suez Canal and that is only the beginning of the mounting losses. Twelve ships containing live sheep and cattle baked in the Egyptian sun coming closer and closer to not having anything for the animals to eat. Supply chains were threatened and manufacturing stoppages became a possibility. Who is ultimately responsible for delays and losses will play out in court for years. Six days doesn’t seem like a very long time, but in shipping circles, it is an expensive eternity.
We Did OK By The Expansion
When the Panama Canal began the Herculean task of doubling the capacity of the Panama Canal, the news reports were unrelenting about how the tugs were a disaster, the concrete too porous, the locks were leaking, and there wasn’t enough water. With the new portion open for about five years now, ships continue to go through the canal almost without incident. A couple of ships have sustained damage to their hulls, but the accidents have been pretty much inconsequential.
Prior to the opening, The New York Times ran a huge expose about how everything was wrong with the expansion, but none of the fears they predicted have played out. Panamanians are still waiting for another story about how well the expansion is going and going and going–just like the bunny! It’s not all luck, although as a country we are very lucky and grateful.
The Importance Of The Fourth Bridge
With the canal operating well, the fourth bridge which will span it is taking shape. The six-laned bridge is one more major infrastructure project that is shaping the new Panama. The subway line, which will also be on the bridge will provide easy access to the Veracruz and Panama Pacifico parts of the capital city, essentially opening the country.
Multinational companies continue to locate regional headquarters in Panama because of the logistical advantage the canal provides. This, of course, builds demand for rental residences. Because of the pandemic, real estate opportunities abound along with lower-than-usual developer financing, tax incentives, and fast-track residency.
Looking At The Queuing Ships
The luxurious condominiums at Casa Bonita are especially attractive, given the fourth bridge and the successful launch of the canal’s expansion. Sitting along Panama Bay and the Pacific Ocean, the residences look over the ships queuing up to transit the canal. Twenty minutes from the heart of Panama City, they also provide easy access to Costa del Este, Panama Pacifico, and Casco Viejo.
I’d love to discuss with you what is currently available for purchase in Panama during this exciting time when the country just keeps going and going and going! Email me, call me or send a text as I answer every inquiry.