The canal crosses the Isthmus of Panama for a length of about 82 kilometers, connects the Atlantic and Pacific oceans and saves ships much longer journeys around Cape Horn or through the Strait of Magellan, at the southern tip of North America. South.
However, the canal is becoming increasingly dry. The operating company Panama Canal Authority (Autoridad del Canal de Panama) began reducing the number of crossings per day months ago, first from 36 to 32 and most recently to just 18 per day in November.
Driest October since 1950
According to the operator, the month of October was the driest since 1950. The climate phenomenon “El Niño” is responsible for the low water, which is causing the canal's water reservoir to dry out. At the end of October, the amount of precipitation was 41 percent below the long-term average.
APA/AFP/Luis Acosta October brought the lowest rainfall in at least 73 years
The water level in Lake Gatún, the huge reservoir created for the construction of the Panama Canal, has now dropped to its lowest level ever, the Panama Canal Authority explains on its website. A section of the route almost 30 kilometers long passes through the approximately 425 square kilometer reservoir. It was created through the damming of the Chagres River.
Poker for the top spots
Shipowners with large transport ships (Multipurpose Carriers, MPP) would now switch to other routes, at least during the next few months, the specialized platform Project Cargo Journal based in Rotterdam (Netherlands) reported a few days ago.
APA/AFP/Luis Acosta A familiar sight for months: ships wait days to enter the canal
United Heavy Lift from Hamburg was the first major shipping company to make a corresponding decision. The main reasons: The level of auctions for ticket permits (ticket slots) has now reached an “exorbitant level”. Some shipowners would pay huge sums of money to have their ships lined up first.
The reason is that many ships wait regularly – and this also costs a lot of money. Keyword waiting time: The Hamburg shipping company cannot estimate when ships of its size will be able to sail through the canal without problems again.
Bigger concerns than the Christmas business
Britain is worried, or so the Chron said on Thursday, about problems at the Panama Canal around Christmas – they fear a lack of presents. “Dozens of large container ships” loaded with smartphones, TVs and clothes are stuck and deliveries will only arrive in Europe weeks late.
The British tabloid also admitted that the problems could extend far beyond the Christmas business in Europe – namely when shipping companies actually have to switch to much longer and more expensive alternative routes from the Atlantic to the Pacific and vice versa.
For now there is no end in sight
Traffic jams at the Panama Canal could have far-reaching consequences for global supply chains; food and fuel prices, for example, could increase if ships are delayed. The problems are expected to continue until the end of the next dry season, in May, perhaps longer. Instead of sailing through the canal in eight to ten hours, as was customary in the past, freighters currently wait a week or two.
According to a report from Fox Weather, a channel owned by North American broadcaster Fox News, on Thursday, around 80 transport ships were recently waiting to enter the Panama Canal and competition was enormous. Some shipping companies paid up to four million dollars (around 3.7 million euros) to move forward in the queue. The Chron calculated that the normal auction price a year ago was around 160 thousand euros.
Just a more expensive alternative
Shipowners may consider whether to wait, pay big money to jump to the front of the line or sail southbound routes past South America, according to a recent report from business news agency Bloomberg. All of this costs money and makes products more expensive. The Panama Canal bottleneck will likely become even narrower.
IMAGO/imageBROKER/Diego Lezama Ships in the canal locks. All other routes connecting the Atlantic and Pacific are much longer.
The coming period will bring less capacity, more travel, higher costs and a less efficient supply chain, Bloomberg quoted British American Shipping CEO Paul Snell: “Everyone will have to be creative and think about what they are doing.”
The Panama Canal opened on August 15, 1914. The first attempts to build the waterway between the Atlantic and the Pacific were made in the 1880s, but the idea is much older. Construction was difficult, the work extremely dangerous and around 5,600 workers died. In 2010, one million ships sailed through the canal, an average of about 14,000 per year.