Panama Canal Cuts Daily Ship Transits as El Nino Drought Deepens

PANAMA CITY, Panama —

The Panama Canal Authority said Thursday it will reduce the number of ships allowed through the waterway each day, citing a severe drought tied to the El Nino weather pattern.

Starting September 3, the canal will allow 34 vessels a day to pass, down from the current 36, the authority said. That number will fall again to 32 starting September 15. The agency said it could impose further cuts depending on rainfall in the coming weeks.

The Panama Canal links the Atlantic and Pacific oceans and lets ships skip a much longer, more dangerous route around the southern tip of South America. Deutsche Welle reported that the canal handles about 5% of global maritime trade, while Euronews reported it also carries roughly 40% of U.S. container traffic. The BBC reported that around 14,000 ships pass through the canal each year and that it brings in about $3 billion a year for Panama, one of the country's most important sources of income.

A Drought in One of the Wettest Places on Earth

The cuts stem from unusually dry conditions in a country known for heavy rainfall. The canal authority said rainfall from May through August ran about 34% below the historical average in the watershed that feeds the canal, according to Deutsche Welle. Two artificial lakes supply the water the canal needs to operate, and those same lakes provide drinking water for roughly half of Panama's 4.2 million residents, Euronews reported.

El Nino warms surface waters in the central and eastern Pacific Ocean, which can trigger droughts, floods and wildfires around the world. Scientists have said this year's El Nino could become one of the strongest since record-keeping began in 1950, according to Deutsche Welle.

The canal authority has already taken steps to save water, including reducing how deep the largest ships can sit in the water, Euronews reported. But the agency said Thursday that more action is needed to protect what it called the "long-term sustainability" of the waterway.

Rising Costs for Shippers

The restrictions will likely mean longer waits for ships without a reservation. Euronews reported that nine out of every ten vessels using the canal book a slot in advance, while the rest bid for the remaining openings at auction. Before the Iran war disrupted traffic through the Strait of Hormuz, the average winning bid for a slot was about $135,000 (115,000 euros), according to Euronews. In April, one shipping company paid $4 million (3.4 million euros) to secure passage, the outlet reported.

This is not the first time the canal has faced this problem. During a 2023 drought, the authority cut the number of daily transits from 38 down to 22, according to Deutsche Welle and Euronews. Panama's main canal customers include the United States, China, Japan, Chile and South Korea, Euronews reported.