Panama Canal warns that throughput could become even tighter

The Panama Canal Authority (AMP) has said that it might be forced to reduce further the maximum number of authorized daily vessel transits if this year’s drought continued.

The AMP said that further passage restrictions were not planned for this month but that, in its budget for the fiscal year beginning October, the canal foresaw a possible cut to either 30 or 31 daily transits.

AMP head Ricaurte Vasquez said that this year’s El Niño weather phenomenon had been very severe. “We have hot temperatures in the Pacific and the Atlantic simultaneously. We anticipate that in the upcoming months, in the absence of significant rain, we’ll have to be prepared.” 

A backlog of ships is currently waiting to pass through the canal, which handles an estimated 5% of world trade. Vessel draughts and daily passage numbers have been cut this year to conserve water in the country’s reservoirs, which also provide the population’s water for ordinary use. Panama knows that eventually it must modify the way water flows to the Gatun Lake to secure enough water for the canal, which uses 50m gallons of fresh water for each ship passing through.  “We are eagerly working with the authorities in order to make an arrangement that leads to the structure of additional reservoirs,” Vasquez said. The proposed project, which would require a change in legislation and must be submitted to congress, could open up for bids next year.

Up to 32 ships are currently authorized to transit every day, down from 36 ships in normal conditions. Maximum vessel draught has been limited to 44ft, down from 50ft when no restrictions are in place.

The AMP recently changed its reservation system to allow more non-booked vessels to pass and to prioritize ships waiting the longest. As of last week about 116 vessels were waiting to pass in Panama, down from a spike of more than 160 in early August. The maximum wait time was down to an estimated 14 days, from 21 days a month ago, according to official data.

The head of the Panama Canal Authority, Ricaurte Vasquez, said the waterway would opt for reducing daily transits if needed, before planning any further cut to authorized vessel draft, which affects shippers the most. 

Water levels at the Gatun Lake, which feeds the waterway, were at 79.7ft last week, about 10% below the September norm in recent years.  If the drought extends beyond 12 months, the canal could be forced to change its weather modelling, which could trigger additional restrictions, Vasquez said.