Panama Canal may reduce daily ship crossings further amid El Nino drought
The new administrator said transit slots could be cut from 32 to 29 per day as water levels drop. Panama has declared a national emergency over the El Nino weather pattern. The canal already reduced crossings from 36 to 32 and handles 5% of global maritime trade.
The canal's operation depends on rainwater collected in two reservoirs, which El Nino has drained. Administrator Ilya Espino de Marotta proposed lowering daily transits to 29, following a previous cut from 36 to 32.
Demand for the waterway has paradoxically risen, as shippers seek alternatives to the Strait of Hormuz, blocked by Iran amid the US-Israel conflict. The waterway moves 5% of global maritime trade, while this El Nino is predicted to be the strongest in 40 years.
Fewer daily transits could delay cargo deliveries and increase shipping expenses, potentially raising consumer prices. Panama's revenue from canal tolls may decline if the cut takes effect. Since shippers are already rerouting from the blocked Strait of Hormuz, the reduced capacity could intensify global supply chain strain, impacting manufacturers and retailers reliant on predictable maritime schedules.