2023, the year when the prolonged drought raised alarms in the Panama Canal.
The Panama Canal has gradually reduced the number of daily transits in 2023 to reach 31 ships in November.
By EFE
The severe drought, a result of the El Niño phenomenon and the extension of the dry season, has raised alarms in the Panama Canal, forcing the interoceanic passage to implement drastic measures to address this unprecedented situation in 2023.
Some of these measures include the reduction of daily transits until next year, the draft of vessels, and the variable fee charged for the use of fresh water, which will have an economic impact in the fiscal year 2024, spanning from October 1st of the past year to September 30th of the next.
One of the direct effects has been the bottleneck for entering the canal, with up to 160 vessels waiting, mainly ships without reservations, meaning without a scheduled crossing, which are mostly bulk carriers, gas carriers, chemical tankers, among others.
By this Friday, there were 75 ships in the queue, 47 with reservations and 28 without, according to data from the interoceanic passage, a significant route in global trade that under normal circumstances moves between 500 to 510 million tons of cargo each year.
Economic Consequences
The Panama Canal has gradually reduced the number of daily transits in 2023 to reach 31 ships in November, and it is expected that in the coming February only 18 ships will cross, according to forecasts.
“The forecast is that in January there should be 20 transits and in February 18. We are evaluating this (…) and monitoring it every day because if some precipitation can come as in November, when the accumulated rainfall was 300 millimeters and that helped a little to improve the situation,” said Nelson Guerra, hydrologist supervisor of the canal, to EFE.
The Panama Canal could lose around 200 million dollars in revenue in 2024 due to the reduction in daily transits it has been forced to implement because of the drought, said its administrator, Ricaurte Vásquez, last August.
As compensation, the passage announced in September a reduction of around 50% in the variable fee it charges for using fresh water due to the scarce rains this year in Panama, a country that only has two seasons, dry and rainy.
Despite this and facing the reduction in daily transits as well as a bottleneck at the canal’s entrance, some shipping companies have chosen to explore alternative routes, even though they may be longer and more expensive, as reported by the local press citing specialized media.
A Hot Year, Lake Level Drops
Due to the El Niño phenomenon, the average accumulated rainfall in the canal’s watershed – of about 350,000 square kilometers approximately, in the heart of the passage – for 2023 is 25.6% less than the average of the last 73 years, according to official information.
“We are dealing with a water deficit issue this year. Regarding rainfall, in the period from January 1st to December 5th, and compared to the historical record from 1950 to the present date, (2023) is being, so far, the third year with the least rain or drier in the last 74 years,” pointed out Guerra.
The Canal has previously warned that it has been raining less in the country for two decades. Last October was the driest month since records began, with 41% less rainfall than usual.
Therefore, the water level of Lake Gatun, the main source of the canal, has dropped to approximately 81 feet PLD (Precise Level Datum) compared to the 88 feet PLD of a “normal year,” an atypical situation in December when the dry season begins in Panama, explained Guerra.
The Panama Canal is exploring the possibility of creating a new water reservoir, a decision that falls into the hands of the Executive.