The Panama Canal is experiencing a historic drought causing delays and disruptions in global supply chains due to lower water levels, reducing the amount of cargo ships can carry. Canal operators are limiting the number of vessels allowed to pass through each day, leading to longer wait times and higher tolls. The canal's future now hinges on the $2 billion plan to divert additional rivers into the waterway, which is a costly and lengthy undertaking. To balance the water needs of the canal, the environment, and Panama's growing urban population, the canal authority is investing in new infrastructure outside the waterway.
1. The Panama Canal is facing a backlog of more than 200 ships waiting for weeks to pass through the waterway.
2. Lower water levels due to a historic drought are cutting into shipping times and bottom lines, causing delays that ripple through the global economy.
3. Shipping companies have to reduce cargo loads to sail through the canal, risking getting trapped if ships are too heavy.
4. The Canal has limited the amount of vessels that are allowed to pass through each day, resulting in longer wait times and higher tolls.
5. Shipping executives say container vessels pay around $400,000 to cross the waterway, and the delays for non-book vessels increased 280% since June.
6. The disruptions in the canal's operations could hurt southern hemisphere exporters and northern importers.
7. Adding new reservoirs to the canal is a costly and lengthy undertaking, with river diversions also putting pressure on the region's limited water sources.
8. The Panama Canal Authority is investing in new infrastructure outside of the waterway, and administrators say drought and changing weather patterns have cut the timeline down to 10 years.