The Panama Canal is a man-made, lock-type waterway that serves as a vital global maritime shortcut, connecting the Atlantic Ocean (via the Caribbean Sea) and the Pacific Ocean across the Isthmus of Panama. Its creation was a massive engineering project intended to solve the problem of ships having to navigate the lengthy and hazardous 8,000-nautical-mile route around Cape Horn at the southern tip of South America. The French began the first attempt at construction in 1881, but the venture failed by 1890. The United States took over and completed the canal, which officially opened in August 1914.
The canal's mechanism relies on a system of water locks to raise and lower ships over the Continental Divide. Ships are raised from sea level to the level of the artificial Gatun Lake, which is approximately 26 meters (85 feet) above sea level, using water from the lake by gravity. They then navigate the lake and the narrow Culebra Cut before being lowered back to sea level on the opposite side. The canal was originally controlled by the U.S. until December 31, 1999, when full operation, administration, and maintenance were transferred to Panama, in compliance with the Torrijos-Carter Treaties of 1977.
A significant recent change was the Panama Canal Expansion Project, also known as the Third Set of Locks Project, which began in 2007 and became commercially operational on June 26, 2016. This expansion added a third, wider lane of locks to accommodate larger vessels, known as Neopanamax ships, which are about one and a half times larger than the original Panamax size. The original lock system and its function remain, but the expansion effectively doubled the canal's capacity and allowed it to maintain its strategic importance in global trade, where it handles approximately 6% of the world's commerce. The canal is now managed by the Panama Canal Authority (ACP), an autonomous government entity of Panama.