Panama Canal cuts ship traffic again as El Niño drought worsens

The Panama Canal is preparing to reduce daily ship traffic again as a worsening El Niño-driven drought lowers water levels and adds pressure to one of the world’s most important trade routes.

The Guardian reports that from October an average of 29.5 vessels will be allowed to transit the canal each day, down from 36 in August. Authorities had already reduced daily transits to 32 in September as rainfall fell below forecasts.

The 82-kilometre canal handles about 5 percent of global maritime trade and roughly 40 percent of United States container traffic. It is widely used by vessels trading between Asia, China and the US because it can significantly shorten journeys and reduce costs.

The restrictions come as shipping companies are already dealing with disruption around the Strait of Hormuz linked to the Middle East conflict. In August, ships were waiting as long as 10 days to enter the Panama Canal, while high demand pushed the price of auctioned priority transit slots sharply higher.

El Niño is expected to peak later this year and could become the strongest such event in four decades. The canal relies on freshwater from rivers feeding Lake Gatun to operate its locks, which raise and lower vessels between sea level and the lake.

If water levels fall below safe thresholds, the Panama Canal Authority can impose further limits on the number and size of vessels allowed through. Similar drought conditions in 2023 forced daily transits down from 38 to 22 and created major shipping bottlenecks.

Source: The Guardian

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