Panama Canal Hit by Drought, Causing Traffic Disruptions

Panama Canal tracked via ShipXplorer 

Approximately 1,000 ships navigate through the Panama Canal each month, carrying a cumulative cargo of over 40 million tons—equivalent to around 5 percent of global maritime trade volumes. However, the water levels in this crucial link connecting the Atlantic and Pacific Oceans have dropped to critical lows due to the most severe drought in the canal's 143-year history.

Drought-induced restrictions, implemented in response to inadequate rainfall affecting Gatun Lake, the canal's water source, have reduced throughput by approximately 15 million tons this year. Ships have experienced an additional six days in transit. Authorities are actively exploring strategic measures to augment the water supply in the canal.

Historically, droughts have threatened the canal's operations, particularly in 2014-2016 (El Niño) and 2019-2020. What raises concern is the increasing frequency of these drought occurrences. The anticipated reduction in traffic at the canal is expected to persist for at least another four months, raising concerns about potential supply chain disruptions and the possibility of inflation.

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