Slashed Panama Canal crossings delay shipping

panama canal

The operator of the Panama Canal has cut the number of crossings for a third time, causing delays and a drop in earnings for shipping companies.

The El Niño weather phenomenon has contributed to the worst drought in 70 years, leaving the canal without enough water, which is used to raise and lower ships.

Daily crossings of the 80-kilometre waterway were reduced earlier this year from 39 ships to 32, and then to 29. The Panama Canal Authority said traffic would now be cut to 25 ships a day and will drop to 18 ships a day by February.

“In October 2023, there has been 41 per cent less rainfall than usual lowering Gatun Lake to unprecedented levels for this time of year,” the Authority said in a statement. “The Canal and the country face the challenge of the upcoming dry season with a minimum water reserve that must guarantee supply for more than 50 per cent of the population and, at the same time, maintain the operations of the interoceanic waterway.

Each ship passing through requires 200 million litres of freshwater to move it through the canal’s locks system, which functions like water elevators and is supported by two artificial lakes fed by rainfall.

For more than a century, the Panama Canal has provided a convenient way for ships to move between the Pacific and Atlantic Oceans, helping to speed up international trade by reducing time and distance. Operating 24 hours a day, 365 days a year, between 13,000 and 14,000 ships use it annually, according to the Authority.

For the approximate six per cent of global maritime trade that passes through the canal, the cuts are expected to increase the cost of shipping goods around the world. In August a record queue of 163 ships was counted.

This isn’t the first time a canal has backlogged the shipping industry. In 2021 the Suez Canal was blocked for six days by the Ever Given, a container ship that had run around after it was buffeted by strong winds and wedged across the waterway blocking traffic.

In other news, TIP Group has acquired one of Rotterdam’s oldest family-owned transport companies.

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