Due to a historic drought, the Panama Canal is experiencing a backlog of more than 200 ships, with wait times lasting for weeks. Lower water levels have resulted in shipping delays, longer transit times, and higher costs, which are rippling through the global economy. To adapt to a drier planet, the Panama Canal is considering diverting additional rivers into the Waterway at a cost of $2 billion. However, this could put pressure on the region's limited water sources and the surrounding rainforest ecosystems. The canal operators are working to balance the water needs of the canal, the environment, and Panama's growing urban population, investing in new infrastructure outside of the Waterway and fast-tracking critical infrastructure build outs to support economic growth and population growth.
1. The Panama Canal is experiencing historic drought leading to a backlog of more than 200 ships waiting for weeks to pass through the waterway.
2. Cargo ships are stalled for more than 20 days and are facing delays and increased costs due to lower water levels that cut into shipping times and bottom lines.
3. The canal has limited the amount of vessels that are allowed to pass through each day, which means longer wait times and higher tolls.
4. The transit time and costs are leading some bulk carriers to seek out alternate routes, and shipping executives say increasing transit times and costs are affecting Southern Hemisphere exporters and Northern importers.
5. Canal operators are working to maintain a balance between the water needs of the canal, the environment and Panama's growing urban population, and are investing in new infrastructure outside of the Waterway to provide complementary services to be provided for cargoes that can wait in Panama to find the final destination.
6. The opportunity is now to fast-track critical infrastructure build-outs as drought and changing weather patterns have cut the timeline down to 10 years.