Panama Canal Experiencing Worst Drought in a Century

Panama Canal Experiencing Worst Drought in a Century

Time Stamp: June 21, 2023 9:38 AM
Source Node: 2737017

The government agency that manages the Panama Canal implemented transit restrictions in May, as a result of the canal’s driest spell in more than a century. Since then some large vessels have had to reduce container loads by roughly one-quarter, presaging new delays and higher costs for the global supply chains, says The Wall Street Journal.

The restrictions are expanding over the coming weeks, with the allowable draft of vessels stepping down to 43 feet from the 50-foot peak level.

Restrictions aren’t uncommon there, but this year’s dry season is proving particularly harsh, and water levels at the canal’s Gatún Lake could hit record lows next month. Officials have spent years planning for more extreme weather events to preserve the canal’s role as a vital trade route. 

The outlook for 2023 has shipowners and charterers adjusting operations to meet the lighter-load requirements, and weighing the costs of routing shipments elsewhere.

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