Panama Canal to Extend Restrictions Amid Drought, Creating Maritime Traffic Jam

via Agence France-Presse

In response to a severe drought, the Panama Canal will maintain limitations on vessel transit for an extended period of one year, resulting in a bottleneck of marine traffic as ships queue up to access this vital waterway connecting two oceans.

The Panama Canal, an engineering marvel responsible for facilitating six percent of global maritime trade by transporting ships through water locks, is grappling with a scarcity of rainwater essential for its lock operations. These locks essentially function as water elevators, allowing ships to traverse the isthmus that links the Atlantic and Pacific Oceans.

Ilya Espino, the canal's sub-administrator, disclosed to AFP that unless substantial rainfall occurs within the next three months, they anticipate a year-long period of restricted access. This extended timeframe will provide canal clients with an opportunity to strategize and adapt to the situation.

Each vessel passing through the canal necessitates a staggering 200 million liters of freshwater to navigate the locks. This vital resource is supplied by two artificial lakes sustained by rainfall from the surrounding watershed. These lakes also serve as a primary source of drinking water for approximately half of Panama's 4.2 million inhabitants.

However, Panama is grappling with a severe drought, exacerbated by the El Niño warming phenomenon, prompting canal authorities to enforce restrictions, limiting access to ships with a maximum draft (water depth) of 13.11 meters (43 feet).

In 2022, an average of 40 vessels transited through the canal daily, but this number has dwindled to 32 as part of water-saving measures. Consequently, a backlog of ships has formed, eagerly awaiting their turn to enter the 80-kilometer waterway, primarily used by clients from the United States, China, and Japan.

Currently, about 130 vessels are queued up, compared to the typical 90-vessel queue. Waiting times, which usually span between three to five days, have now escalated to as much as 19 days, though they currently stand at approximately 11 days.

Earlier this month, canal operators projected a potential $200 million reduction in earnings for 2024 in comparison to this year due to the imposed restrictions.

To traverse the canal, vessels can reserve a transit slot in advance or attempt to acquire one through an auction process. For those unable to secure a slot, extensive waiting periods ensue.

Panama's President, Laurentino Cortizo, recently refuted claims made by his Colombian counterpart, Gustavo Petro, that the canal was closed. Furthermore, Mexican President Andres Manuel Lopez Obrador acknowledged the unique challenges confronting the waterway this week.

The Panama Canal, which commenced operations in 1914 after an epic construction effort through dense jungles and mountains, has facilitated the passage of over a million vessels, sparing them the arduous journey around the tip of South America.