There has been much discussion about the issues affecting the world’s two largest shipping channels, with Suez Canal transits dropping off because of the Houthi attacks on commercial shipping, but what has been happening at the Panama Canal?
In short, the Panama Canal has been severely hampered by drought for almost a year now, and has had to dramatically reduce the number of vessels that are allowed to use the waterway each year.
Being the only point in North and South America where container vessels can pass between the Pacific and Atlantic oceans, the Panama Canal has around 5% of world trade travelling through it. The canal is operated by a series of tiered locks which rely on a water supply from two artificial lakes.
A record-breaking drought has led to severely low water levels in the lakes since last April, which has affected operations and led to a restriction in its capabilities.
Under normal conditions, 38-39 vessels can transit the canal each day, but that limit was reduced to 32-34 for much of last year and since November has been limited to just 24 daily passages.
As a result, there has regularly been more than 100 vessels queuing to pass the canal, leading to waiting times of around 15 days and in some extreme cases almost a month.
The issues have largely affected all water services between the UK and West Coast locations through North and South America, along with services between Asia and the North and South American East coasts.
The partially good news is that the Panama Canal Authority have confirmed there will be no further reductions until at least April, but there are no indications that the existing restrictions will be uplifted any time soon.
