There’s a backlog of vessels waiting to cross one of the world’s crucial maritime passageways which saves ships from travelling thousands of kilometres.
Low water levels in the Panama Canal prompted capacity cuts earlier this year and carriers are still facing months of navigating restrictions.
Here’s why the canal is drying up and what it could mean for the world’s maritime commerce.
Why is the Panama Canal important?
The canal is a 65km-passage which about 6 per cent of all global shipping trade passes through.
It connects the Atlantic and Pacific Oceans and its construction significantly reduced the journey for ships travelling between the oceans.
The Panama Canal cuts through Central America
More than 14,000 ships crossed the canal in 2022.
Container ships are the most common users of the Panama Canal and transport more than 40 per cent of consumer goods traded between north-east Asia and the US east coast.
What has caused low water levels in the Panama Canal?
Panama is one of the world’s wettest countries but an El Niño pattern is contributing to a prolonged drought.
Rainfall is about 30 to 50 per cent below normal and the area around the canal is experiencing one of the two driest years in the country’s 143 years of keeping records, according to data from the Smithsonian Tropical Research Institute (STRI).
The Gatun Lake is the principal reservoir that floats ships through the canal.
Water levels in the rainfall-fed lake have remained below normal despite the current “wet season”.
STRI’s Steven Paton said a potential early start to Panama’s dry season and hotter-than-average temperatures, typical of major El Niño events, could increase evaporation from Gatun Lake and result in near-record low water levels by March or April 2024.
What impact is the drought having on shipping?
Carriers have been forced to offload cargo or consider alternative routes to comply with restrictions imposed by the Panama Canal Authority.
The government agency has reduced maximum ship weights and daily ship crossings in a bid to conserve the canal’s water.
“Each time a ship goes through there, it uses up about 80 Olympic-sized swimming pools of water and that all comes out of the lake,” maritime logistics expert from Deakin University Peter Van Duijn told ABC News.
He said the drought means that water isn’t being replaced at the moment.
Ship owners have the options of carrying less cargo, adding thousands of kilometres to their trips or grappling with queues that earlier this month backed up 160 vessels and delayed some ships by as much as 21 days.
Panama Canal Authority recently opened two more passage slots per day for ships that don’t have have priority to pass, as container ship do, and this week the backlog had decreased since to 115 ships.
How long will restrictions last?
The Panama Canal expects to maintain restrictions for at least another 10 months.
The extension of the restrictions would give the canal room for preserving water before the next rainy season arrives, but could create a larger bottleneck of ships if they do not reserve ahead of passage.
“We are currently seeing an increase in arrivals,” the canal’s deputy administrator Ilya Espino said on Thursday.
“It is peak season as December is approaching, so merchandise for Christmas is moving quickly.”
The frequency of major El Niño drying patterns has risen significantly during the last 25 years of the canal’s 109-year history.
Mr Paton said that if that continues, it will be increasingly difficult for the canal to guarantee that the largest ships are going to be able to get through.