The Panama canal plans to again cut maritime traffic due to worsening drought caused by the El Niño climate phenomenon, further choking up one of the world’s most important shipping lanes.
The canal handles ۵% of global maritime trade and about ۴۰% of US container traffic; it is favoured by shippers because it usually reduces cost and transit times, especially for companies trading between China, Asia and the US.
From October, an average of ۲۹.۵ vessels will be allowed to transit daily – down ۱۸% from ۳۶ in August, according to a draft plan submitted to Panama’s parliament. In September, officials cut daily transits from ۳۶ to ۳۲ because of the drought.
The US and Israel’s war on Iran, and its disruption to the strait of Hormuz, has complicated logistics and added costs for shipping companies using the canal.
In August, with vessels waiting ۱۰ days to enter the canal – the longest since May – a container ship reportedly paid about $۴m (£۳m) to jump the queue. Maritime companies usually pay a flat fee to reserve a slot to transit the canal, but a daily auction allows shipowners to place bids to skip the queue. Bid prices generally rise during high demand.
Shipping restrictions on the canal could yet worsen, with El Niño expected to peak later this year. The natural weather pattern that brings worldwide changes in winds, air pressure and rainfall patterns is forecast to be the strongest in four decades.
The ۸۲km-long canal, connecting the Caribbean Sea to the Pacific Ocean, relies on fresh water from rivers pouring into Lake Gatun to operate its system of locks. In September, officials said the watershed had received lower than forecast rainfall.
The canal’s locks act like elevators, each filling with water to lift ships ۲۶ metres (۸۵ feet) from sea level to Lake Gatun and then back down to sea level on the other side.
If lake levels are no longer safe for the largest ships to pass, the Panama Canal Authority imposes restrictions for safety and to preserve water.
In ۲۰۲۳ the water level in the lakes feeding the canal was so low authorities cut daily transits from ۳۸ to ۲۲. Those restrictions led to a bottleneck of ships and sent companies scrambling to find alternative routes.
El Niño has severely affected Central America and northern parts of South America, where nine countries have experienced their hottest June-August period on record this year.
Fifty-two countries across all continents broke their seasonal temperature records for that period, according to an Agence France-Presse analysis of meteorological data from the European Copernicus programme.
The extreme heat has taken many forms, from unprecedented heatwaves in Europe to devastating drought in Sudan and toxic smoke in Indonesia.
More than a third of people experiencing the hottest northern summer months on record were in Africa, particularly in the Sahel and areas south of it.
Eighteen African countries broke their seasonal records for the June-August period, from Mauritania and Sierra Leone in the west to Eritrea and Ethiopia in the east.
