The Panama Canal is a 51-mile-long waterway across the isthmus of Panama. Each year, it allows as many as 14,000 vessels to travel between the Pacific and Atlantic oceans.
After its debut in 1914, it significantly shortened shipping times, and now accounts for about 5% of global seaborne trade. It remains one of the most ambitious engineering projects in history, requiring over three decades, 75,000 workers, and more than $5B in today’s dollars to build.
Origins
The idea to cut a waterway across the skinniest part of the American continent dates back at least as far as 1513 when Spanish conquistador Vasco Nuñez de Balboa led the first European expedition across the isthmus of Panama to the Pacific.
Over three centuries later, France began construction on a canal led by engineer Ferdinand De Lesseps, who had recently overseen the construction of the Suez Canal. When political and economic problems caused France to leave the project, the US took over in 1904, overseeing the canal’s completion in 1914.
Construction and Operation
There were two ways to build a canal across the mountainous Continental Divide: one was to excavate the ridge down to sea level. But when French (and later, American) engineers tried, heavy rain caused landslides that buried months of work and thousands of workers.
If the mountains couldn’t be cut down, the ships would have to find a way to sail “uphill.” To accomplish this, American engineer John Frank Stevens proposed a different solution: a series of locks, or watertight chambers that can be filled or emptied as needed to raise and lower transiting ships. Vessels entering from the Atlantic side pass through a set of ascending locks, sail across a 15-mile artificial lake, then descend to the Pacific—a process that now takes 8 to 10 hours to complete.
It was grueling work for the estimated 75,000 workers. Over a decade, they moved almost 300 million cubic yards of earth—the equivalent of burying Manhattan to a depth of 12 feet—with the help of steam shovels and dynamite. Recruited from the Caribbean, Central America, and Asia, they battled torrential rains, venomous snakes, and malaria, in addition to the landslides, for either “gold” or “silver” salaries, depending on the laborer’s race.
Economic Impact
Building the Panama Canal cost US taxpayers $375M in 1914 dollars, a figure that doesn’t include more than $250M expended on the earlier French effort. But the investment paid dividends: Overnight, the Panama Canal shaved weeks off of global shipping times, helping to make the United States a global superpower.
In 1977, President Jimmy Carter signed a treaty pleading to hand over control of the canal to Panama, ensuring the vital waterway would remain neutral. The Canal passed from American to Panamanian control on December 31, 1999. Fees from vessels that use the canal—mostly container ships, but also those carrying cars, gas, refrigerated goods, and cruise passengers—add around $5B per year to Panama’s economy.
Troubles Ahead
The Panama Canal has been a dominant global shipping route for over a century, but it is vulnerable to threats from climate change and regional competitors. When a severe drought in 2023 forced crossings to be cut by nearly a third, use fees went up and shippers began looking for alternatives. Honduras, Colombia, Mexico, and Nicaragua have all explored building their own canals or overland routes in hopes of getting a piece of the pie.
US leaders have sometimes threatened to retake control of the canal in order to gain lower fees to use it.
The Panama Canal connects the Atlantic and Pacific Oceans through a 51-mile route that transformed global shipping when it opened in 1914. This breakdown covers how it was built, the workers behind its construction, and why its future may be challenged by climate and competition.
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This platform, a partnership between the International Monetary Fund and Oxford University, uses satellite data to track chokepoints and trade disruptions along the shipping lanes that crisscross the globe. Search for data from more than 1,600 ports, or run the climate scenario simulator to visualize what might happen to a given economy if climate-related hazards are not mitigated by 2050.
More than 75,000 workers labored to build the Panama Canal, and up to ⅓ of them, by some estimates, died on the job. This gallery of 16 archival black-and-white photographs from PBS shows what life was like for them, from the West Indian men who drilled the upper Miraflores locks in 120-degree heat to the sanitation squads charged with spraying for malaria-carrying mosquitoes.
The Panama Canal dominates shipping in the Western Hemisphere, but it’s not without its challengers. This online journal, run by three professors specializing in maritime economics, maps out some of the alternative interoceanic options that have been proposed, from overland routes that rely on railways to transport goods coast-to-coast, to Arctic Ocean passages.
The first ship to cross the isthmus of Panama went not by sea but by land: the paddlewheel steamship Explorer was taken apart and transported by rail, an effort that generated “more trouble than profit,” according to one account. Another plan from 1880 called for building a railroad across Mexico to lift entire ships out of the water and load them onto giant locomotives traveling at 10 miles per hour.
While trying to build the canal, thousands of workers fell ill with a mysterious fever that, once contracted, could kill a man in days. It took a while for doctors to figure out that mosquitos were the cause, and when one finally did — and asked authorities for funding to control the pests — nobody believed him. Then President Teddy Roosevelt intervened.
For each mile of canal that was built, 500 workers lost their lives, about 25,000 deaths in total. The threats came from multiple fronts: mudslides, floods, earthquakes and disease-carrying mosquitoes. Workplace accidents became so common that artificial limb manufacturers competed for contracts with the canal builders. History details the hazards workers faced.
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