Panama Canal may further reduce crossings because of El Niño drought

The Panama Canal could cut ship crossings again if drought caused by El Niño does not ease, putting further pressure on a waterway that handles about 5% of global maritime trade.

Ilya Espino de Marotta, who took over as head of the Panama Canal Authority, said officials could lower the daily limit to around 29 crossings in February or March. She said the canal did not rule out further reductions, although she did not expect traffic to fall to 24 crossings a day.

The canal has already reduced its maximum from 36 ships last month to 32 by mid-September. It relies on rainwater stored in two reservoirs to operate the locks that raise and lower vessels, and reservoir levels have fallen as El Niño develops. Each ship uses about 200 million litres of water before that water is discharged into the sea.

Authorities have also reduced the maximum draft from 15.2 metres to 14.6 metres. The canal connects the Atlantic and Pacific and provides the fastest maritime route between the US east coast and China. The United States and China are its main users, and the waterway carries about 40% of US container traffic.

The canal is facing higher demand as shippers seek alternatives to the Strait of Hormuz, which the article says Iran blocked in retaliation for the war launched by the United States and Israel. In 2023, El Niño forced daily crossings down from 38 to 22. Experts have warned that prolonged restrictions could raise shipping costs and lengthen delivery times, while Espino de Marotta said she did not expect this year’s limits to reach those levels.

“

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.