Panama Canal traffic cut by 36% due to drought linked to climate change, El Nino
- One of the most severe droughts to ever hit the Central American nation of Panama has caused chaos in the maritime route, causing a traffic jam of vessels
- It casts doubts on the canal’s reliability for shipping, at a time when attacks in the Red Sea by Yemen’s Houthi rebels have diverted vessels away from there
A severe drought that began last year has forced authorities to slash ship crossings by 36 per cent in the Panama Canal, one of the world’s most important trade routes.
The new cuts announced on Wednesday by authorities in Panama are set to deal an even greater economic blow than previously expected.
Panama Canal Administrator Ricaurte Vásquez now estimates that dipping water levels could cost them between US$500 million and US$700 million in 2024, compared to previous estimates of US$200 million.
One of the most severe droughts to ever hit the Central American nation has stirred chaos in the 80km (50 miles) maritime route, causing a traffic jam of vessels, casting doubts on the canal’s reliability for international shipping and raising concerns about its affect on global trade.
“It’s vital that the country sends a message that we’re going to take this on and find a solution to this water problem,” Vásquez said.
The disruption of the major trade route between Asia and the United States comes at a precarious time.
Attacks on commercial ships in the Red Sea by Yemen’s Houthi rebels have diverted vessels away from the crucial corridor for consumer goods and energy supplies.