Monday, October 2

The Panama Canal will experience an additional decrease in daily transits if the drought persists.

The bulk carrier of Monrovia NSU CHALLENGER is en route to the expanded canal through Cocoli Locks at the Panama Canal, on the outskirts of Panama City, Panama on April 19, 2023. REUTERS/Aris Martinez acquire licensing rights.

The Panama Canal’s administrator stated on Tuesday that the maximum number of authorized daily vessel transits could be reduced if the current drought continues.

The trans-oceanic canal, which handles an estimated 5% of global trade, has a backlog of vessels waiting to be transported. To conserve water, the company introduced restrictions on vessel draft and daily passage authorizations in late June.

Prior to Christmas shopping, many ships had to reduce their cargoes and the freight costs have gone up.

Under new conditions, there is now a maximum of 32 ships allowed to transit per day, while the draft for vessels has been reduced from 50 to 44 feet.

The canal’s reservation system was modified to alleviate bottleneck, allowing for more unbooked vessels to pass and prioritizing the most tardy ones.

According to official data, 116 ships were waiting in Panama as of Tuesday, surpassing the number of vessels that had already arrived in early August. The maximum wait time was 14 days, down from 21 days a month ago.

The Panama Canal Authority’s leader, Ricaurte Vasquez, declared that the waterway would decide to decrease daily transits if necessary, before cutting off the draft for authorized vessels, which has a significant impact on shippers.

The canal has not announced any measures to limit passengers during this month. Nevertheless, it is anticipated that the budget for the fiscal year starting in October may reduce services to 30-31 daily, as per the speaker’s statement.

According to Vasquez, the El Nio weather has been extremely severe this year, causing the Pacific and Atlantic to experience hot temperatures at the same time. He also stated that in the absence of heavy rainfall in recent months, we should be ready for it.

Long-lasting motion of the bowel movement.

The Gatun Lake, which serves as the waterway’s source, experienced a drop in water level from 26.6 meters to 24.2 meters last week.

Vasquez stated that if the drought persists beyond a year, the canal may have to modify its weather modeling, which could result in additional limitations.

He said: ‘We don’t think the canal will be closed.

Panama must eventually alter the water flow to the Gatun Lake to meet the demand for the canal, which requires 50 million gallons of fresh water per ship.

“We are eagerly collaborating with the authorities to create an arrangement that leads to the structure of more reservoirs,” Vasquez stated. The proposed project, which would require a change in legislation and must be submitted to congress, may be open for bids next year.

Prior to what is expected to be an even drier period next year, maritime trade could be affected, according to experts. A potential early start to Panama’s dry season and hotter-than-average temperatures could lead to increased evaporation and near-record low water levels by April.

Marianna Parraga was responsible for reporting, while Gary McWilliams, Timothy Gardner, and David Gregorio handled the editing.

The Thomson Reuters Trust Principles are the basis for our standards.

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