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The Panama Canal Is Drying Up

Uh oh.

The Panama Canal.
Heatmap Illustration/Getty Images

The Panama Canal is in trouble.

In an advisory dated Monday, the Panama Canal Authority said it will cut the number of ships allowed to pass through the waterway on a typical day in half due to a drought afflicting the region. This year has been the area’s second driest since 1950, according to the authority, with no relief forecast for the rest of 2023.

The authority said “unprecedented” levels at an artificial lake feeding into the canal are forcing it to cut the number of ships making the crossing every day from 32 in October to 25 at the beginning of November. The authority will then continue to slash capacity every month, all the way down to 18 ships on February 1. Typically, 36 crossings are allowed per day. When lighter restrictions were first imposed in August, the result was a pileup at the canal, with more than 160 boats waiting to go through, according to the Energy Information Administration.

The canal works by moving ships up and down through a system of locks, which require water from nearby lakes. When there’s less water in the lakes, fewer of the massive ships that navigate the canal can pass through. That causes delays, which drives up the cost of shipping items through the canal.

Around 500 million tons of cargo pass through the canal annually, according to Bloomberg. That’s about 6% of global trade, most of which starts or ends in the United States.

Climatologists have blamed the drought in Panama on El Niño, the weather pattern that begins with warming water in the Pacific Ocean and often causes dry weather in Panama and wetter winters in parts of the United States.

Matthew Zeitlin profile image

Matthew Zeitlin

Matthew is a correspondent at Heatmap. Previously he was an economics reporter at Grid, where he covered macroeconomics and energy, and a business reporter at BuzzFeed News, where he covered finance. He has written for The New York Times, the Guardian, Barron's, and New York Magazine. Read More

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