El Niño Driven Drought Chokes Panama Canal, Global Trade Faces New Bottleneck
What Happened
The Panama Canal will reduce the number of ships allowed through its locks starting in September as a severe El Niño-driven drought lowers water levels in the lakes that supply the canal. Daily vessel transits will be cut from 36 to 34 on September 3 and further to 32 on September 15.
Key Takeaways
The Panama Canal handles about 5% of global maritime trade and around 40% of US container traffic. Fewer ship crossings could lead to longer delays, higher shipping costs, and renewed pressure on global supply chains if drought conditions worsen.