Since May 2023, the Panama Canal has faced low water levels, resulting in shipping delays and higher transit fees. Is this just a rare dry spell, or could it indicate future challenges?
The Panama Canal is crucial for global trade, moving over 500 million tons of cargo and facilitating more than 14,000 transits annually. Despite being expanded in 2016 to handle larger vessels, 2023 has seen ships encountering long waits and increased fees. In August, more than 150 ships were stuck in lines for weeks.
So, what’s causing these delays? The main issue is a lack of water. Unlike the Suez Canal, which sits at sea level and is fed by ocean water, the Panama Canal relies on freshwater from the Chagres River. Two reservoirs, Gatún and Alajuela, provide this water. Every time a vessel passes through, about 50 million gallons is used, then released. Typically, there’s enough runoff to support operations and local needs. But in 2023, Lake Gatún has remained low, failing to recover after its seasonal drop.
The Panama Canal Authority has responded to the water shortage by limiting daily crossings, reducing advance bookings, and asking ships to carry less cargo. Some shipping companies are paying hefty fees to bypass the lines; for example, one company paid $2.4 million on top of standard fees for quicker passage.
So why has Panama, known for its rain, been so dry this year? While El Niño typically influences rainfall patterns, the current drought began months before El Niño conditions developed. This situation reminds us that multiple factors affect weather, and we shouldn’t single out one cause.
Historically, Panama receives plenty of rain, especially due to the Intertropical Convergence Zone (ITCZ), where trade winds create rainstorms. However, climate change is warming the region, leading to fewer cool nights and unpredictable rainfall trends. Some surrounding areas are getting drier, but Panama’s rainfall patterns are less clear. The accuracy of climate data is limited since there are few weather stations within the canal’s watershed.
Looking ahead, the canal’s situation may worsen due to the developing El Niño, potentially leading to record low water levels by spring 2024. Experts like Dr. Hugo Hidalgo warn that while predictions on rainfall may vary, a hotter climate is expected. Increased temperatures can result in more evaporation, which could harm water reserves like Gatún and Alajuela.
The Panama Canal’s operation will always be dependent on climate. When there’s ample rainfall, trade thrives. On the other hand, current drought conditions pose a serious challenge, marking one of the toughest times in the canal’s history. Plans are underway to explore new dams that could help with water supply, but the canal will continue facing risks associated with drought — a clear signal of climate change’s impact in the region.
