The Panama Canal will cut the number of ships passing through it starting September 3 due to drought linked to the El Niño weather pattern. The Panama Canal Authority announced on Thursday that the daily limit will drop from 36 to 34 vessels. This limit will further decrease to 32 ships from September 15. Rainfall in the region has been about 34% below the historical average from May to August. This has severely impacted water levels in the lakes that feed the canal.
Key Details
El Niño is marked by unusually warm ocean surface temperatures in the Pacific. This can cause major changes in weather patterns around the world. The canal handles about 5% of global maritime trade and 40% of U.S. container traffic. It has faced challenges in recent years due to similar drought conditions. In 2023, the number of daily ship transits was cut from 38 to 22 because of low water levels.
Background
The Panama Canal Authority has put in place various water conservation measures. These include lowering the maximum draft for larger vessels. The authority said these steps are needed to save water resources and ensure the canal's long-term sustainability. With the new restrictions, waiting times for ships without reservations are expected to rise. Most vessels use the canal with prior bookings.
The cut in ship transits could lead to higher shipping costs and delays. This may affect sectors that rely on timely deliveries, such as retail and energy. Investors will look for further updates on rainfall and possible additional restrictions as El Niño conditions develop.
Based on reporting by: dw.com, euronews.com