The Panama Canal

Hernan Cortes, a Spanish who conquered Mexico, was the first to have the idea of building an 82-kilometer canal connecting the Pacific and the Atlantic Oceans. He suggested the idea to Charles V of Holy Roman Emperor who was also Spanish King Charles I in 1529. The emperor who lived by a motto “Plus Ultra,” meaning “Not(hing) further beyond," reviewed it seriously but couldn’t realize the plan. He introduced a prime time for the Habsburg family, and thus was busy with other issues such as wars with the Ottoman Empire and France. The construction technology of the time was nevertheless mature enough to create such an epic history.

France began working on the canal in 1881 with its technology successfully built the Suez, but stopped after nine years due to engineering problems and a malaria outbreak killing 22,000 workers. The United States took over the project and opened the canal on August 15, 1914 after a decade of hard work. The historic Panama Canal shortcut greatly reduced the time for ships to travel between the Atlantic and Pacific Oceans, enabling them to avoid the 22,500-kilometer route and shortening the distance between New York and San Francisco to 9,500 kilometers.

A new standard called "Panamx" for the maximum size of the ships that can pass through was established: 32 meters wide and 295 meters long. The ship makers had to consider the size when building vessels. From June 26, the expanded canal allowing passage of vessels up to size of 49 meters in width and 366 meters in length will be opened. This is indeed a good news for the Korean shipbuilding industry faced with difficulties, as it is expected to boost demand for "post-Panamax" size vessels.

On the other hand, the shipping industry projects a rather gloomy prospect, calling the new canal a disaster following Brexit. Passage of larger vessels will lead to lower charges and heightened competition to secure volume, pushing down the price even further. Crediting rating agency Moody’s reduced the credit rating for the global shipping industry from "stable" to "negative." The failing shipping industry as well as other firms faced with crisis would have to completely change their ways of thinking as did Hernan Cortes, in order to survive.