The Hows and Whys of International Trade in the Panama Canal: Key Insights
- Hana Watanabe, Wallet Product Lead
- 24 hours ago
- 19 min read
The Panama Canal is one of those rare shortcuts that changed the whole game for global trade. It slices through Panama, linking the Atlantic and Pacific Oceans with a 50-mile waterway. Since it opened back in 1914, this marvel has totally reshaped how goods move around the world. Ships no longer have to risk the long, dangerous trip around South America's southern tip. The canal slashes shipping distances by thousands of miles, cuts fuel bills, and gets stuff delivered faster between Asia, North America, and Europe.
Every year, thousands of ships squeeze through the canal, hauling everything from cars and electronics to food and raw materials. It’s a cash cow for Panama, thanks to those toll fees, but it also helps keep shipping costs in check for businesses everywhere. In 2016, they finished a huge expansion—bigger locks, bigger ships, basically doubling what the canal can handle.
Learning how the Panama Canal works (and why it matters) really helps you get how today’s global trade ticks. Sure, the canal faces headaches from climate change, rival shipping routes, and the usual political drama, but it’s still a key link in the supply chains that fill up stores and homes worldwide.
Key Takeaways
The Panama Canal gives ships a critical shortcut between the Atlantic and Pacific, saving time and money for global shipping
The 2016 upgrade lets the canal handle much bigger ships and way more cargo
The canal brings in big revenue for Panama and helps tie together trade between Asia, the Americas, and Europe
The Strategic Role of the Panama Canal in International Trade
The Panama Canal acts as a vital connector between the Atlantic and Pacific, handling about 5% of global maritime trade every year. It serves over 144 shipping routes and links up roughly 1,700 ports, so it’s pretty much essential for international shipping and global business.
Importance in Global Shipping Routes
The canal gives ships a straight shot between oceans, so they don’t have to swing around South America’s bottom edge. That shortcut chops off thousands of miles and saves close to a month of travel compared to the Cape Horn route.
Key shipping route benefits include:
Lower fuel use and operating costs
Faster delivery for time-sensitive shipments
Less environmental impact—shorter trips, less fuel burned
Better global shipping connections
Every year, thousands of ships carrying containers, bulk cargo, cars, and energy products rely on this waterway to keep global shipping running smoothly.
About 40% of all U.S. container traffic moves through the Canal annually. The U.S. is the biggest customer—over 70% of the cargo either starts or ends at American ports. China comes in second.
Impact on Global Commerce
The canal is a huge moneymaker by cutting shipping costs and making trade possible between far-flung markets. For Panama, it’s a backbone of the economy, making up around 7.7% of the country’s GDP through tolls and logistics services.
Economic contributions to global commerce:
The canal’s location makes it a lifeline for trade between North America, South America, and Asia. If something goes wrong—like in 2023, when drought cut transits by up to 30%—the ripple effects hit supply chains everywhere.
Maritime trade counts on the canal being open and reliable. Any hiccup affects container shipments, farm exports, minerals, and energy deliveries.
Relevance to International Supply Chains
Today’s global supply chains run on speed, efficiency, and tight budgets. The Panama Canal is a critical hub, letting goods move quickly between factories and markets.
The canal’s role goes beyond just letting ships pass through. It anchors Panama as a logistics hotspot, with ports, railways, and warehouses that help move and store cargo.
Supply chain functions include:
Just-in-time inventory for retailers
Shipping farm products from South America to the world
Moving energy resources between producers and consumers
Delivering manufacturing parts across continents
Ships hauling goods from East Asia to the U.S. East Coast save crucial days by using the canal. That speed matters for perishable goods, seasonal items, or anything that needs to arrive fast.
Because the canal is so baked into global supply chains, its reliability directly affects what’s on store shelves and how much stuff costs. Water shortages, maintenance, and capacity limits all play a part in how well trade flows through this key passage.
Geographic Significance and Engineering Marvels
The Panama Canal sits on a skinny strip of land, making one of the shortest connections between two massive oceans. Engineers built a network of locks and an artificial lake to lift and lower ships, so they could avoid a detour of thousands of miles.
Isthmus of Panama and Canal Location
The Isthmus of Panama is basically a narrow land bridge connecting North and South America—only about 50 miles wide at its tightest point. That made it the obvious spot for a canal joining the two oceans.
The canal stretches from Colón on the Atlantic side to Panama City on the Pacific. A ship going from New York to San Francisco saves about 8,000 miles by using the canal instead of circling South America. This shortcut turned the isthmus into one of the world’s busiest shipping corridors.
Building the canal wasn’t easy. The area’s mountains, thick jungles, and shifting ground gave engineers a real headache.
Connection of the Pacific and Atlantic Oceans
The Panama Canal physically links the Pacific and Atlantic with a 50-mile path. Ships enter from either side, then pass through locks that raise or lower them to cross the land’s elevation changes.
Each year, more than 14,000 ships use the canal, moving around 5% of global trade. The waterway sees cargo ships, cruise liners, and even military vessels from all over. A typical transit takes about 8 to 10 hours.
With the third set of locks added in 2016, the canal can now handle massive Neopanamax ships. These giants carry way more cargo than older models, boosting the canal’s capacity and keeping it relevant in modern shipping.
Role of Gatun Lake in Canal Operations
Gatun Lake is the heart of the canal’s lock system. Built by damming the Chagrin River, this artificial lake sprawls over about 166 square miles and sits 85 feet above sea level.
When ships enter, locks lift them up to the lake’s elevation. They cross the lake, then descend through another set of locks on the other side. The lake supplies millions of gallons of water for every ship that passes through.
Managing Gatun Lake’s water is a constant challenge. How many ships can go through each day depends on rainfall and lake levels. Climate change and shifting weather patterns make water supply a moving target for canal operators.
Historical Background of the Panama Canal
The story of the Panama Canal stretches over four centuries, starting with Spanish explorers and ending with a massive American engineering project. Along the way, there were failed attempts, deadly disease outbreaks, and the tragic loss of thousands of workers before the canal finally opened in 1914.
Early Conception and Failed French Attempt
Back in 1513, Spanish explorer Vasco Núñez de Balboa first floated the idea of a canal across Panama after he crossed the isthmus. He scribbled the thought in his journal but didn’t take it further.
The real action started in 1881, when Ferdinand de Lesseps—the guy behind the Suez Canal—tried to build a sea-level canal in Panama. Unfortunately, Panama’s terrain was nothing like Egypt’s, and things went downhill fast.
The French effort fizzled out by 1889 after eight grueling years. Disease wiped out around 22,000 workers. The company went bankrupt after burning through nearly $287 million. They badly underestimated the mountains, wild rivers, and tropical diseases of Panama.
American Construction and Challenges
In 1904, the U.S. bought the French equipment and rights for $40 million. American engineers switched to a lock-based design instead of a sea-level canal, which turned out to be the right call.
Crews had to dig through the Continental Divide at Culebra Cut, moving mountains—literally. They built giant locks to hoist ships 85 feet above sea level. At its peak, the project employed more than 40,000 workers.
The canal finally opened on August 15, 1914, after a decade of American work. The U.S. spent about $375 million to finish the 50-mile waterway from the Atlantic to the Pacific.
Overcoming Yellow Fever and Malaria
Yellow fever and malaria were deadlier than any construction accident during the early days. These mosquito-borne diseases devastated the French workforce and nearly derailed the American effort.
Dr. William Gorgas led the fight to wipe out these diseases in the Canal Zone. His team drained swamps, put up window screens, and fumigated buildings across Panama. They cleared brush and oiled standing water to kill mosquito larvae.
The results were dramatic—yellow fever cases dropped to zero by 1906. Malaria cases fell a lot too, though it never disappeared completely. This medical victory let construction move forward and set a global example for fighting tropical diseases.
Political Developments and Control over the Canal
The Panama Canal’s political story is a long one—decades of American control, a lot of negotiation, and finally, a handover to Panama. The U.S. took control through treaties right after Panama’s independence, ran the Canal Zone as its own turf, and eventually agreed to pass the reins to Panama in deals signed in 1977.
The Canal Zone and American Oversight
The Canal Zone was a 10-mile-wide strip that the U.S. ran from 1903 to 1979. It stretched across Panama, from ocean to ocean, and operated like a little piece of America.
American officials ran the show with their own laws, police, and courts. Workers and their families lived in American-style towns, complete with schools, post offices, and stores. They even used their own currency and postal system.
Panama surrounded the Canal Zone but had zero say in what happened inside. This odd setup meant Americans controlled a major swath of land right through Panama’s middle. Not surprisingly, this caused more and more tension as the years went by.
Hay-Bunau-Varilla Treaty and Panamanian Independence
Panama declared independence from Colombia on November 3, 1903. American warships showed up and kept Colombia from interfering. The U.S. wasted no time recognizing Panama as independent.
Just two weeks later, on November 18, 1903, the Hay-Bunau-Varilla Treaty was signed. Oddly enough, Philippe-Jean Bunau-Varilla, a French engineer who’d worked for the failed French canal company, represented Panama—even though he wasn’t Panamanian and actually lived in New York.
The treaty handed the U.S. control over the Canal Zone “in perpetuity,” treating it like American territory. Panama got $10 million up front and annual payments of $250,000 starting nine years later. There wasn’t much room to negotiate—Secretary of State John Hay basically threatened Panama’s leaders if they didn’t sign.
Transition via Torrijos-Carter Treaties
The Torrijos-Carter Treaties got signed on September 7, 1977, by President Jimmy Carter and Panamanian leader Omar Torrijos. These agreements set out a plan to hand the canal over to Panama by December 31, 1999.
The first treaty mapped out the gradual transfer. Panama slowly took on more responsibility for canal operations during this period. The second treaty, known as the Neutrality Treaty, made sure the canal would stay neutral and open to ships from all countries. The U.S. also kept the right to defend the canal if its operation ever came under threat.
The U.S. wrapped up the transfer on December 31, 1999. Panama took full control through the Panama Canal Authority, an independent government agency. This marked the end of almost 96 years of American oversight of this crucial shipping route.
Transformation of Global Shipping Patterns
The Panama Canal totally changed the way ships move goods globally, chopping thousands of miles off traditional shipping routes. Instead of braving dangerous southern passages, ships traveling between the Atlantic and Pacific now got a direct shortcut, turning weeks at sea into just hours through the canal.
Reduction of Travel Distance and Time
The canal slashes the trip between New York and San Francisco by about 8,000 nautical miles. Instead of a grueling 13,000-mile journey around South America, vessels now cover just 5,200 miles through the canal. This means ships can make the journey in 8-10 hours, not weeks.
Every year, over 14,000 vessels pass through, moving around 203 million tons of cargo. The canal handles about 6% of global trade across its 50-mile stretch. Container ships, bulk carriers, and tankers all take advantage of the shortcut, saving big on fuel and operating costs.
Comparison to Cape Horn Route
Before the canal opened in 1914, Cape Horn was infamous for its brutal storms, wild currents, and risky waters at South America's southern tip. Ships needed extra crew, more supplies, and pricier insurance just to make it around.
The Panama route wipes out those dangers. Shipping companies save on average $400,000 per trip by using the canal instead of going around Africa or South America. Now, even traffic that used to have no good options can move smoothly through Central America.
Influence on International Shipping Efficiency
The canal made new trade flows possible and changed the game for regional shipping. Asian manufacturers suddenly had a direct line to East Coast markets in North America and Europe. South American agricultural products could reach Asia faster and cheaper.
Shipping patterns shifted as companies fine-tuned their routes. Big ports grew up at both ends of the canal, turning into transshipment hubs for the region. The canal’s presence shaped where manufacturers built factories and how they set up supply chains. Ships stick to tighter schedules and cut down on inventory costs thanks to quicker, more predictable transit times.
Economic Impact on Panama and the World
The Panama Canal pulls in major revenue for Panama and slashes shipping costs worldwide. It keeps thousands of locals employed and pumps billions into Panama’s economy every year.
Revenue Generation and Contribution to Panama's GDP
The canal brings in about 4% of Panama’s GDP through tolls collected from passing ships. These fees depend on ship size and cargo, giving Panama a steady income. The canal runs as a private entity, keeping toll collection pretty efficient.
Between October 2023 and September 2024, cargo volumes soared. The U.S. stayed the top user, responsible for about 40% of container traffic. China came in second, with 21.4% of the cargo moving through the canal.
The 2016 expansion added bigger locks for New Panamax ships, boosting capacity and toll revenue. This move really locked in Panama’s role as a key player in global maritime trade.
Effects on Local Employment and Economy
The canal directly employs thousands of Panamanians who run the locks, manage traffic, and keep everything in working order. Plenty more jobs exist in ports, logistics, and shipping support businesses.
Besides direct jobs, the canal gives a boost to Panama’s service sector. Hotels, restaurants, and tourism thrive thanks to visitors coming to see canal operations. Financial services grew as international firms set up shop in Panama to take advantage of its location.
Thanks to the canal, Panama’s infrastructure ranks among the best in Latin America. Both public and private investments in roads, ports, and telecoms support shipping and benefit the wider public.
Global Trade Cost Savings
The canal chops shipping distances dramatically compared to other routes. A trip from San Francisco to New York takes about 10 days through the canal, versus 27 days around the Strait of Magellan. That’s a ton of savings on fuel, labor, and time.
Each year, about 5% of global trade flows through the canal, connecting more than 140 maritime routes and 1,700 ports in 160 countries. Container ships moving goods between Asia and the U.S. East Coast depend heavily on this shortcut.
These efficiency gains mean lower prices for consumers everywhere. Shorter shipping times mean fresher produce, quicker delivery of goods, and more competitive trade. Companies pass these savings along, making products more affordable at the end of the line.
Canal Operations and Management
The Panama Canal Authority runs the show—from scheduling ships to collecting tolls. The authority oversees nearly 9,944 transits a year, guiding each vessel through the canal’s lock system with precise procedures.
Panama Canal Authority and Governance
The Panama Canal Authority (ACP) has managed the canal since 1999, when the U.S. handed it over under the Torrijos-Carter Treaties. The ACP works as an autonomous government entity, handling all operations, upkeep, and upgrades.
Thousands of workers keep things moving along the 40-mile waterway. The Administrator leads the ACP and reports to a board of directors. This setup keeps the canal running independently while still sending revenue to the national budget.
The agency sets high safety standards and sticks to strict procedures for international customers. It also keeps investing in infrastructure to boost efficiency and handle more ships.
Operational Processes and Vessel Transit
Ships cross the Panama Canal using a lock system that lifts and lowers them between the Atlantic and Pacific. There are three main lock complexes, each moving vessels through different water levels.
On average, ships wait about 15 hours to enter the canal. Once inside, it takes roughly 8 to 10 hours to make it through all the locks. From arrival to departure, the whole process usually takes around 24 hours.
The canal handles two main ship types: Panamax (the original size limit) and larger Neopanamax vessels (added after the 2016 expansion). In fiscal year 2024, the canal saw 7,084 Panamax transits and 2,852 Neopanamax transits. Container ships, chemical tankers, and bulk carriers make up most of the traffic.
Toll System and Cargo Classification
The canal charges tolls using the CP/SUAB system, which looks at ship size and cargo capacity. Different types of ships and cargo get different rates.
In fiscal year 2024, the canal processed 423 million tons of cargo. Toll revenue depends on things like:
Vessel size and tonnage
Cargo type and volume
Whether the ship is loaded or in ballast
Ship category (container, tanker, bulk carrier, etc.)
This toll structure brings in billions each year, staying competitive with other shipping routes. The Panama Canal Authority tweaks rates now and then to match costs and market shifts.
Expansion Projects and Evolving Capabilities
The Panama Canal’s had to keep up with modern shipping, so big changes were made—new locks, bigger ships, the works.
Introduction of the Third Set of Locks
The Third Set of Locks Project doubled the canal’s capacity by adding a whole new traffic lane. Construction wrapped up in 2016 after years of hard work. The new locks are 70 feet wider and 18 feet deeper than the originals from 1914.
This was the biggest upgrade since the canal first opened. Engineers designed the new lane for ships that used to be too large for the canal. The project meant building huge new lock chambers and dredging deeper channels.
With the extra lane, ships move through the canal faster. Wait times dropped, and the canal can now handle more transits each day.
New Panamax and Larger Vessels
The expanded locks led to a new class of ships: New Panamax vessels. These container ships haul way more cargo than the old Panamax ships built for the original locks.
New Panamax ships stretch up to 1,200 feet long and 160 feet wide. They can carry about 13,000 to 14,000 twenty-foot containers—more than double what older Panamax vessels managed. The deeper locks fit ships with drafts up to 50 feet.
Major shipping lines built new fleets just for these bigger locks. This shift changed global shipping routes and opened up more direct paths between Asian factories and East Coast ports.
Handling Growing Cargo Volumes
The expansion was a direct answer to rising trade and busier shipping lanes. The canal now moves a lot more cargo every year than before the new locks.
Container ships make up much of the increased traffic. With bigger ships, each transit carries more goods, making shipping more efficient. The canal authority pulls in more revenue from these giants, since larger ships pay higher tolls.
Trade between Asia and the eastern U.S. got a lot more competitive after the expansion. Ships don’t have to rely on smaller vessels or roundabout routes to reach Atlantic coast ports anymore.
Geopolitical and Competitive Dynamics
The Panama Canal sits at the heart of a tangled web of trade routes and global interests. The Suez Canal offers another shortcut, and big players like the US and China are always keeping an eye on this strategic waterway.
Suez Canal Comparisons and Global Maritime Chokepoints
The Panama and Suez Canals are the world’s two biggest maritime shortcuts. The Suez links Europe to Asia via the Red Sea, while Panama connects the Atlantic and Pacific. Ships moving between Asia and the US East Coast have to pick the better route based on costs, timing, and whatever’s happening in the world.
Key Differences Between Major Canals:
Recent problems at both canals have exposed weak spots in global supply chains. The Suez Canal got blocked in 2021 when a container ship ran aground. Meanwhile, drought has cut Panama Canal capacity by lowering the water levels needed for the locks.
Shipping companies are always rethinking their routes. Fuel, tolls, and distance all play into which canal they’ll use at any given time.
US, China, and International Stakeholders
The U.S. keeps a close watch on the Panama Canal, given its impact on American trade and its location. The 1977 Torrijos-Carter Treaties included the Neutrality Treaty, letting the U.S. defend the canal if its neutrality ever comes under threat. That’s still a hot topic in some circles.
China’s influence in Panama has grown through port operations and big infrastructure investments. Chinese companies now run ports at both ends of the canal, like in Balboa and Cristobal. These moves have sparked concern in Washington about China’s sway over vital shipping routes for U.S. trade.
Other countries also count on the canal for smooth commerce. Japan, South Korea, and EU countries send loads of cargo through every year. Around 14,000 ships use the canal annually, carrying goods valued at over $270 billion.
Potential Rival Projects
There are a few other routes and projects that could challenge the Panama Canal. Nicaragua's been talking about building its own canal for decades, but environmental worries and money problems have basically kept it on the drawing board. If it ever gets built, the Nicaragua Canal would be bigger and deeper than Panama's.
Some cargo skips the canal altogether by using rail and road corridors across Mexico and Central America. Mexico's Interoceanic Corridor of the Isthmus of Tehuantepec, for example, aims to move containers by train between its Pacific and Atlantic ports.
Up north, Arctic shipping routes like the Northwest Passage might become practical as the ice melts. Theoretically, these routes could cut travel time between Asia and Europe, but for now, they're risky and unreliable most of the year. The Panama Canal Authority keeps an eye on these developments, and they're pouring money into upgrades and expansion to stay ahead.
Challenges and the Future of the Panama Canal
The Panama Canal's up against some big hurdles—mainly water shortages and climate change. Keeping the canal open for global trade means finding billions for new infrastructure and coming up with creative fixes to make sure the waterway lasts.
Climate Impacts and Water Shortages
Since 2023, droughts have hit the canal hard. It normally handles about 5% of the world's seaborne trade, but water levels in Gatun Lake dropped six feet below normal. That forced officials to cut daily vessel crossings from 38 down to 24 at the worst point.
The canal depends entirely on fresh water from Gatun Lake to run its locks. Every ship uses enough water to fill 76 Olympic-sized pools. Climate change has made El Niño seasons harsher, so Panama gets longer dry spells. On top of that, higher temperatures mean more water just evaporates from the lake.
During the 2023 dry season, Barro Colorado Island in Gatun Lake saw its lowest water levels ever. You could spot tree stumps from forests flooded over a century ago poking above the water when they should've stayed underwater. It's a pretty stark reminder of how much things have changed.
Shippers ran into serious delays and extra costs during the drought. Some companies shelled out millions just to skip the line, while others rerouted their ships around Africa or South America. The canal still managed to bring in $4.3 billion in 2022—it's Panama's biggest moneymaker by far.
Sustainability and Long-Term Viability
The Panama Canal Authority wants to spend $2 billion on a project to dam the Indio River and tunnel through a mountain, piping water into Gatun Lake. They say it'll take at least six years to finish and could let 11 to 15 more ships through every day. The US Army Corps of Engineers is running a study to see if the plan will actually work.
But not everyone is happy about it. Thousands of local farmers and ranchers stand to lose their land if the new reservoir goes ahead. Past protests against mining in Panama show that communities can and do stop big infrastructure projects.
Back in 2016, the canal got bigger locks to handle huge cargo ships, but they didn't build a new water reservoir. That gap left the canal exposed when the drought hit. The officials now admit they need to dam more rivers to make sure there's enough water through the end of the century.
Opportunities for Future Innovation
The canal authority's trying out cloud seeding to boost rainfall. Starting in November, a Weather Modification Inc. plane began spraying salt particles into clouds. This technique works in some dry regions, but honestly, nobody's sure it'll do much in Panama's tropical climate.
Engineers are also looking into ways to recycle more water in the locks, but saltwater contamination gets in the way. They're hoping to cut down on the 76 Olympic pools' worth of water each ship uses, though it's a tricky problem.
Panama's being pushed to find solutions that balance its economy with environmental needs. Any future project has to juggle growing shipping demand and the need for fresh water for Panama City's 2 million-plus residents.
Frequently Asked Questions (FAQs)
The Panama Canal pulls in billions every year, connecting 160 countries and 144 shipping routes while saving ships thousands of miles on their journeys. The lock system lifts and lowers vessels between the Atlantic and Pacific, letting them cross the isthmus instead of sailing all the way around South America.
What economic impact does the Panama Canal have on global trade?
The canal made almost $3 billion from tolls in 2021. It's Panama's top economic engine and the backbone of a service sector that makes up about 80% of the country's GDP.
It handles 46% of container traffic moving from Northeast Asia to the US East Coast, connecting 160 countries and reaching around 1,700 ports through 144 shipping routes.
Ships save about 7,875 miles going from San Francisco to New York by using the canal instead of sailing around South America. That means less fuel, faster trips, and lower shipping costs for everyone involved.
How does the Panama Canal enhance the efficiency of cargo transportation between the Atlantic and Pacific oceans?
The canal gives ships a direct shortcut between the Atlantic and Pacific, so they don't have to go around South America. That slashes weeks off travel time and thousands of miles from the journey.
It runs 24/7, all year. Ships usually make it across in 8 to 10 hours, using the lock system to cross the isthmus.
The 2016 expansion added bigger locks for Neo-Panamax ships, which can carry up to 12,000 containers. Before that, only ships with 5,000 containers or less could squeeze through.
Why is the Panama Canal considered a significant achievement in engineering?
Engineers had to figure out how to lift ships 85 feet above sea level to get them over the continental divide. The locks use gravity to fill and empty huge chambers, moving vessels up and down through the canal.
They dug out millions of cubic yards of earth and rock to carve the channel, plus built Gatun Lake—the biggest man-made lake in the world when it opened.
Building the canal meant dealing with mountains, jungles, and relentless rain. It took 10 years and workers from all over the globe to finish the job.
What regulations govern the passage of ships through the Panama Canal?
The Panama Canal Authority sets the rules for ship size, draft, and safety. Vessels have to fit certain dimensions to make it through the locks and channel safely.
Every ship pays a toll based on its type, size, and cargo. The authority uses its own Panama Canal Universal Measurement System, which isn't quite the same as standard vessel measurements.
Ships have to book transit slots in advance. During busy times, they can bid for priority passage if they're willing to pay extra.
How has the expansion of the Panama Canal, known as the Panama Canal Expansion Project, affected shipping routes and capacities?
The $5.25 billion expansion finished in June 2016 added a third set of locks—1,400 feet long, 180 feet wide, and 60 feet deep.
That project doubled the canal's cargo capacity. Now, Neo-Panamax ships with up to 12,000 containers can make the trip, compared to the old 5,000-container limit.
Bigger ships can take more direct routes between Asia and the US East Coast, shifting some cargo away from West Coast ports that used to rely on rail to move goods across the country.
What role does the Panama Canal play in determining international trade routes?
The canal stands out as a crucial link for ships moving between North America, South America, Europe, and Asia. Shipping companies often map out their routes with the canal's size limits and tolls in mind—nobody wants surprise costs or delays.
Manufacturers and distributors actually weigh canal access pretty heavily when choosing where to set up shop. It's all about finding the easiest way to move stuff between suppliers and customers across the globe.
Sure, there’s competition from places like the Suez Canal and big rail networks, but the Panama Canal still grabs a big chunk of the action, especially for trade between Asia and the eastern Americas.
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