The World Briefly

August 28, 2023

Canal Jams

Panama

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The Panama Canal will extend transit restrictions for cargo ships because of drought-induced low water levels, Panamanian authorities announced this week, a move that could cause further disruptions to global supply chains, Al Jazeera reported.

Earlier this year, canal officials issued a series of restrictions on the vital passageway – through which six percent of the world’s maritime commerce travels. But on Thursday, they announced that these restrictions will be extended for at least 10 more months, further increasing the backlog of vessels waiting to cross.

The backlog currently sits at about 115 vessels, according to official data.

The new restrictions come as the 50-mile passage experiences an unusually dry season, leading to lower water levels. The situation has already forced many ship owners to lighten their cargoes or find alternative routes.

The Panama Canal plays an integral role in worldwide maritime transport by allowing ships to cross with relative ease between the Atlantic and Pacific. It relies on water from neighboring freshwater lakes for its operations, but low rainfall has led to a decrease in water levels.

Analysts told CNN that with the El Niño weather phenomenon intensifying, there are concerns about prolonged dry conditions in the region.

Waiting times to enter the canal used to range from three to five days, but now are up to 11 days on average.

Observers said that while the situation will presently have little impact on US manufacturers and consumers, a prolonged disruption will affect companies’ ability to restock inventories ahead of the holiday season.

This story originally appeared in the August 28, 2023 newsletter, Walking Out.