‘Rainfall deficit’ is putting the future of one of the most important trade routes at risk. Passage through the prominent Panama Canal has slowed and the queue of tankers seeking to pass through has grown. The situation could exacerbate further in the near future.
Connecting the Atlantic to the Pacific Ocean, the Panama Canal opened in 1914 and revolutionised global shipping. It eliminated the need to travel around the dangerous southern tip of South America, shortening the trip by more than 13,000 km.
Rainfall Deficit Exacerbated By El Nino Phenomenon
Over 14,000 ships traversed the route in 2022, transporting fuel, grain, minerals and goods from east Asia to the consumers of New York and beyond. But a ‘rainfall deficit’ has compelled the canal authority to reduce the number of ships it can handle every day to 22 from 36.
Ships enter through a narrow waterway and rise more than 26 m above sea level into the man-made Lake Gatun. On the other side of the canal, the process is reversed and the ships descend to sea level before exiting the canal on the other side of the continent.
The locking system depends on fresh water from Lake Gatun and another nearby reservoir. Every ship uses 200 million litres of water most of which subsequently flows out into the ocean. The same sources also quench the thirst of more than half of Panama’s 4.3 million people.
For decades, there has rarely been a problem of this sort. Panama is one of the wettest countries on the planet and the canal and its surrounding lakes enjoyed abundance. But in 2023, a deficit exacerbated by the El Nino phenomenon triggered a serious crisis.
Red Sea Disruptions Piling More Pressure On Trade
Those who depend on the Panama Canal are left with no good options. They can wait for weeks, pay up to $4 million to jump ahead in the queue, or avoid the route entirely, adding several days to their journey. Every one of these choices come at substantial financial costs and delays.
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Moreover, ongoing attacks on another busy trade route in the Red Sea have resulted in many companies avoiding the Suez Canal altogether. Therefore, simultaneous restrictions at the Panama Canal is set to only pile more pressure on global supply chains.
