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August 22, 2023

Panama Canal’s Ongoing Drought

Panama Canal anticipates full capacity by early 2025 as it slowly recovers from drought. Shipping restrictions will continue to lift over the coming months, relieving pressure on the global supply chain.

Connecting the Atlantic and Pacific oceans, the Panama Canal accounts for around 5-6% of global maritime trade. The recent combination of El Niño, exacerbated by climate change, has resulted in a plummeting of water levels.

Panama’s dilemma with record-breaking droughts on the Gatún Lake has subsequently rendered shipping routes unreliable and subject to sudden disruptions and re-routing. This, in turn, has spurred Panama Canal Authorities to institute restrictions on cargo size and ship passages.

The impact on logistics industries around the world has incurred higher costs and shipping delays. Here at Fortune, we hope that drought conditions will experience some relief over the coming months, and that daily transit slots will soon return to pre-drought levels.