Panama canal traffic to be cut again as drought from El Niño worsens — SkimNews
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- Panama Canal will cut daily transits to an average of 29.5 vessels from October, down 18% from 36 in August, per a draft plan submitted to Panama's parliament; September already saw a reduction from 36 to 32.
- El Niño is forecast to be the strongest in four decades and is expected to peak later this year, threatening further restrictions on the 82km canal that relies on rainfall into Lake Gatun to operate its locks.
- Shipping companies using the canal have faced compounded costs from the US-Israel war on Iran and disruption to the Strait of Hormuz, with one container ship reportedly paying about $4m (£3m) in August to skip a 10-day queue — the longest wait since May.
- Panama Canal Authority imposed restrictions in 2023 that cut daily transits from 38 to 22 when lake water levels fell so low large ships couldn't pass safely, creating bottlenecks that sent companies scrambling for alternative routes.
- Central and South America have been hit hard by the climate pattern: nine countries recorded their hottest June-August on record, part of 52 nations across all continents that broke seasonal temperature records, per an AFP analysis of European Copernicus data.
Why it matters: With 40% of US container traffic and 5% of global maritime trade moving through the canal, the 18% October cut — coming as El Niño is forecast to peak at its strongest in four decades — raises the prospect of another 2023-style bottleneck where transits plunged from 38 to 22 and companies paid millions to auction their way through the queue.
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