Concerns about price increases – Huge queue at the Panama Canal due to drought

The approximately 80 kilometer long canal connects the Atlantic Ocean with the Pacific Ocean in Central America. About 14,000 ships pass through the waterway each year, and about six percent of world trade is handled through this waterway. In recent months, less rain and warmer temperatures have lowered water levels in the Panama Canal’s man-made Gatun Lake, impacting operations.

Global supply chains affected
The daily number of ship passages has recently been reduced from 38 to 32 due to the drought. The maximum draft at which ships are allowed to pass through the canal has also been reduced. These measures affect global supply chains and increase the cost of global trade. The Panama Canal is one of the most important waterways in the world.

Under normal conditions, up to 90 ships wait to pass through the canal. In June the waiting time was about two and a half days, a month later about five days. Now general cargo vessels wait even up to 18 days to transit, as shown by the statistics of the Canal Authority.

The Panama Canal starts in Colón in the north of Panama and ends at Panama City in the south. After the opening of the expanded canal in 2016, the waterway has three systems of locks, allowing the vessels to be raised to the level of Lake Gatun, which is 28 meters above sea level, and later lowered again. Since the expansion of the canal, large tankers and freighters with up to 14,000 containers can also be transported on the waterway.