The Panama Canal, one of the world’s most important trade routes, connects the Atlantic Ocean with the Pacific Ocean. It serves as a maritime shortcut that saves time and costs in transporting all kinds of goods. In recent months, much of Central America, including Panama, has experienced intense drought.
Draught limits on vessels seeking passage through the Panama Canal continue to show an extensive reach throughout the global supply chain. A lengthy and severe drought hitting the Panama Canal has caused water levels to drop to historic lows in July. To avoid ships stranding, the Panama Canal Authority (ACP) has imposed a series of shipping restrictions.
An ideal wait time at the canal was somewhere between two to three hours prior to the restrictions, and the total transit time approximately nine hours. Those wait times have increased significantly, up to five days in some edge cases, and we frequently see vessels exceeding the standard transit time by several hours or more.
“Demand remains high, which proves that the Panama Canal is still competitive in most segments, even with measures taken to save water,” the authority added.
The Panama Canal has a 40%-market share of containers moving from Northeast Asia to the U.S. East Coast.