By: Staff Writer
July 4, 2023
The Panama Canal is still drying up due to drought, making the important shipping way difficult to traverse and putting US trade at risk
The Panama Canal is one of the world’s most important shipping routes. For nearly 120 years, the 51-mile stretch of water has connected the Atlantic and Pacific oceans, allowing massive ships to pass through in 10 hours without navigating the entirety of South America. However, the future of the shipping route is uncertain after record droughts forced operators to impose restrictions on the kinds of ships that can pass through.
The Panama Canal Authority (PCA) is informing customers their latest conservation efforts to save water will include reducing the number of daily transits mostly in its Panamax locks to 32 to 30 transits a day compared to its usual 36 to 34 transits a day reports have indicated.
This reduction in vessel transits will allow the PCA to conserve enough water to postpone the water depth restrictions which would impact how much freight a vessel can carry. Restrictions were expected to start Sunday, June 25, which would equate to an approximate 40% drop in cargo on some containerships.
Allowing more transits would cause water levels to fall further at Lake Gatun, which is projected to drop to 79.5 feet by August from 79.7 feet now, the lowest since July 2019 during a previous drought.
Water from the lake is used to fill locks during transits and then washed out to sea. The freshwater lake also provides drinking water to about half of Panama’s population.
Dr Ricaurte Vásquez Morales, PCA administrator, said the strategy, combined with anticipated rainfall, is designed to bring lake water levels back to 84 feet by mid-November, when the next dry season is expected to begin.
“We are regulating the number of transits to make sure that we compensate the inflows of rain versus the outflows of transits, and trying to keep the lake level at a specific minimum in order to guarantee 44 feet of draft,” Vasquez said. “We are rain takers. We have to make sure that whatever drop falls into the lake, we take the value of it by storing it or properly using it.”
The restrictions have caused longer wait times for ships crossing the canal with 59 vessels currently in line for transits, according to Panama Canal data. Vasquez said the canal authority will prioritize ships that booked transit slots while handling unbooked ships on a standby basis.
Forty percent of all U.S. container traffic travels through the Panama Canal every year, which in all, moves roughly $270bn in cargo annually.
“The U.S. is the main the main source and destination of our traffic,” said Ricaurte Vásquez Morales, administrator of the Panama Canal Administrator. “When you combine all of the commodities and containers to the U.S. it represents about 73% of our traffic. We keep in constant communications with our customers and cargo owners in order to make sure that they know where we’re standing,” he said.
The Panama Canal is popular for East Coast trade because it is faster than other options. The shipping time for ocean cargo from Shenzhen, China, to Miami, Florida, using the Suez Canal takes 41 days. Traveling through the Panama Canal, which is more expensive, takes only 35 days.