Intermodal Advisory: Key Updates on the Panama Canal Drought – Updated 5/22/23

May 19, 2023 | LinkedIn

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UPDATES AS OF MAY 22, 2023:

 

Recent Update:

The Panama Canal Authority (ACP) has implemented further draft restrictions due to the persistent drought affecting the canal. The latest measures, effective May 24th, include a reduction in the maximum authorized draft for Neopanamax vessels to 44.6 ft (13.56 m), down from 45.1 ft (13.72 m). This will impact large container ships carrying 6,000 TEUs or more, potentially resulting in reduced cargo capacity of up to 40%.

 

Upcoming Update:

Starting May 29th, the ACP will institute another round of draft restrictions, lowering the maximum authorized draft for Neopanamax vessels to 43.9 ft (13.41 m). These measures aim to mitigate the impact of the ongoing drought on shipping capacity.

 

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OVERVIEW

Due to falling water levels caused by drought conditions, the Panama Canal has imposed draft restrictions on ships passing through the trade route. This means vessels must comply with reduced maximum depths, impacting cargo capacity.

 

IMPORTANCE OF THE PANAMA CANAL

Approximately 6% of global maritime trade relies on the Panama Canal. Last year, nearly 15,000 vessels carrying 520 million tons of cargo transited the canal.

It plays a vital role in connecting the Atlantic and Pacific Oceans.

 

WHY RAINFALL MATTERS

Rainfall is crucial for maintaining water levels in the canal. Freshwater from Alajuela and Gatun lakes is used to lift vessels. Adequate rainfall ensures the smooth operation of the locks, facilitating the passage of ships between the Atlantic and Pacific Oceans. Each ship passage requires approximately 200 million liters of fresh water.

 

CURRENT SITUATION AND IMPACTS – SEE UPDATE ABOVE FOR THE MOST CURRENT RESTRICTIONS

The Panama Canal Authority (ACP) has begun imposing draft restrictions on container ships transiting the canal. The latest restriction from May 12th, 2023, reduced the maximum authorized draft down to 45.1 ft (normally 50 ft).

This reduction in draft limit will impact shipping capacity and may result in adjustments to cargo volumes.

 

LONG-TERM CONCERNS AND SOLUTIONS

Water shortage and climate change pose long-term threats to the canal. Finding new water sources is essential for its sustainability. The Panama Canal Authority (ACP) is actively working on a project to increase the capacity of Gatun Lake, which is expected to provide a more sustainable water supply for canal operations in the future.

 

HOW TO PREPARE

  • Be prepared for potential delays in shipping schedules.
  • Consider alternative transportation modes or routing.
  • Plan ahead and allow for additional lead time in your logistics operations.
  • Stay in close communication with us for updates and guidance on the latest developments and alternative solutions.

Contact us to discuss shipping options and find the best strategies for your specific needs.

 

WE’RE HERE FOR YOU!

✔️ Expert guidance: Personalized support to navigate the Panama Canal drought’s impact.
✔️ Alternative solutions: Efficient logistics options to minimize disruptions.
✔️ Reliable support: Count on us as your trusted partner to find solutions that optimize your supply chain.


Contact us today to discuss your shipping needs and let us help you overcome the challenges of the Panama Canal drought.

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