Panama Canal to Reduce Booking Slots Due to Drought in Coming Months – Reuters

Panama Canal Shipping Capacity Further Reduced Amid Drought

Panama City – The Panama Canal, a vital maritime trade route, is set to further decrease the number of daily ship crossings in the coming months due to a significant drought, as announced by the canal authorities. This move is likely to lead to increased shipping costs.

Starting November 3, the Panama Canal Authority (ACP) will limit daily bookings to 25 vessels, down from the already reduced figure of 31. The number of allowed slots will gradually decline further over the next three months, reaching 18 slots by February 1.

In response to the critical water shortage, the ACP has implemented several restrictions in recent months to conserve water, including limiting vessel drafts and daily transit authorization.

Gatun Lake, which acts as the main reservoir supplied by rainfall and facilitates the canal’s lock system, has reached historically low levels for this time of year. The ACP reported that October’s recorded precipitation was the lowest since 1950, at 41% below average, making 2023 one of the driest years on record for this period.

The drought is being exacerbated by a naturally occurring El Niño climate pattern, which brings warmer-than-normal ocean temperatures to the central and eastern tropical Pacific.

The delayed onset of this year’s rainy season and insufficient rainfall in the canal watershed prompted the authorities to reduce the average daily transit capacity to 32 vessels starting July 30.

These restrictions have led to significant delays, with numerous vessels currently in line to transit the canal.

An analysis from the U.S. Energy Information Administration highlighted that these delays have contributed to rising shipping rates globally by reducing the number of vessels available. Furthermore, delays for certain gas transporters have reached record levels, inflating the costs associated with shipping liquefied gas from the U.S.