Officials at the Panama Canal Authority have implemented water-conserving measures due to a severe drought and the El Niño weather phenomenon. These measures include reducing draft restrictions for ships by 2 meters and cutting daily transits by 20%. As a result, vessels have been waiting at both ends of the canal. The restrictions are expected to last for at least the next 10 months, affecting shipping schedules and capacity utilization. Container services and cruise itineraries are impacted differently from bulk sectors, which face greater disruptions due to short notice and the need to queue. Collaboration between shipping bodies and the Panama Canal Authority is suggested to optimize resource usage during this period. Despite the current situation, container spot rates haven’t been notably affected yet. However, experts warn that prolonged restrictions could lead to freight rate increases and potential shifts in supply chain strategies.
