Panama Canal to limit shipping ahead of extreme weather during El Nino

The Panama Canal Authority announced new restrictions on daily vessel transits, set to begin in early September. The measures are a response to the anticipated impacts of the El Nino weather phenomenon, which is expected to cause drought and higher temperatures across the region, leading to lower water levels in the canal.

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The El Nino weather phenomenon is expected to increase the likelihood of drought and excess heat across the region.

Beginning September 4, the canal will permit a maximum of 34 vessels per day, a limit that will be further reduced to 32 ships starting September 15. This marks a significant shift from May, when canal officials assured that no crossings would be limited this year, citing water conservation efforts from the previous year. The waterway typically accommodates an average of 35 transits daily, with a capacity for around 40.

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On Thursday, the Panama Canal Authority, the body that oversees the waterway, announced that daily transit caps would be set to address concerns about the drier weather conditions ahead.

The canal, a critical artery for global maritime trade, handles approximately 5 percent of the world's shipping. Any substantial decrease in traffic is likely to result in slower international shipping and potentially higher costs for businesses that depend on the canal. A severe drought in 2023, also linked to El Nino and climate change, previously reduced traffic by about 36 percent, causing significant disruptions to global supply chains.

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Officials told the news service Reuters in May that they had no plans to limit crossings this year, citing water conservation measures imposed last year.

The canal's operation relies on a lock system that uses freshwater from Gatun Lake and other reservoirs. These water sources are also crucial for supplying drinking water to Panama City and surrounding areas, adding further strain during drought conditions. Scientists predict a particularly strong El Nino this year, potentially leading to more extreme weather events globally.

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The canal, which handles about 5 percent of global maritime trade, usually has capacity to accommodate about 40 vessels per day.