One of our Supply Chain Matters 2016 predictions calls for continued turbulence surrounding global transportation and logistics. One of the components of that prediction was whether the long-awaited expansion of the Panama Canal would actually occur in 2016 because of a litany of construction delays and setbacks.

Today, the Panama Canal Authority eased some of that concern in its announcement that the canal expansion will be officially inaugurated on Sunday, June 26, 2016.  This announcement was made in conjunction with today’s opening ceremony of a new state-of-the-art scale model maneuvering training center to be utilized to provide pilots and tugboat captain’s hands-on experience in navigating the expanded canal.

According to today’s announcement, the $5.3 billion Panama Canal Expansion Program is currently 97 percent complete with contractors expected to close out overall locks construction by the end of May. Final testing is further expected to be completed in the weeks leading up to the end of June. This includes a test of the new locks with a large scale tanker in May.

The program itself is roughly two years behind schedule, challenged by engineering setbacks, contractor disputes and cost overruns. The project provides the promise for shifting international trade routes and shortening overall ocean transit times by allowing much larger ships to travel from parts of Asia directly to U.S. East and Gulf Coast port destinations. Larger ocean container vessels, representing nearly three times the size that can currently be accommodated by the canal, will now be able to traverse.

Meanwhile, some U.S. East Coast ports lag behind in efforts to expand their port infrastructures in order to accommodate the larger sized vessels that were restricted to call only on U.S. West Coast ports.  As examples, the deepening the harbor at the Port of Charleston and the raising of the Bayonne Bridge linking ports in New York and New Jersey are each years behind schedule. However, some major ports such as Savannah have declared readiness. Thus, the full impact and benefits for the Panama Canal expansion may take considerable more time to assess.