Panama Canal Considers Further Transit Cuts as El Niño Drives Drought

The Panama Canal could reduce the number of ships allowed through each day if drought caused by El Niño does not ease. Ilya Espino de Marotta, who took over as head of the canal authority on Monday, said the possibility remained open for February or March.

“We do not rule out the possibility that in February or March we may have to lower the limit, probably not to 24 slots per day, but it could be reduced to 29 or something similar,” she told AFP.

Panama has declared a nationwide emergency over El Niño, which is developing over the Pacific and affecting weather patterns worldwide while pushing global temperatures higher. The current event is expected to be the strongest since records began four decades ago.

The canal has already reduced its daily limit from 36 ships last month to 32 by mid-September. It relies on rainwater stored in two reservoirs, and the falling levels threaten the locks that raise and lower vessels. Each ship requires about 200 million liters of water, which is discharged into the sea.

In 2023, El Niño forced the authority to cut daily transits from 38 to 22. Espino de Marotta, the first woman to lead the canal authority, said she did not expect restrictions to reach those levels this time. Authorities have also lowered the maximum draft from 15.2 meters to 14.6 meters.

The canal handles about 5 percent of global maritime trade and around 40 percent of U.S. container traffic. The United States and China are its main users. Traffic has risen as the Panama Canal serves as an alternative route for energy shipments while shipping remains halted in the Strait of Hormuz, according to the report. Experts warn that prolonged restrictions could increase shipping costs and delivery waiting times.

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We do not rule out the possibility that in February or March we may have to lower the limit, probably not to 24 slots per day, but it could be reduced to 29 or something similar.