Panama Canal Drought Situation Deteriorating

The situation at the Panama Canal has been deteriorating over recent weeks, following a delay to the rainy season, leading to large shipping queues waiting to pass the drought-hit waterway.

The canal usually operates with around 37-38 ships passing through each day, but since June that number was reduced to around 30-32, before being drastically cut to 22 this month.

The Panama Canal Authority (ACP) have recently suggested that the reduced capacity restrictions could see the daily vessels cut to 18 by February.

Last month was the driest period in the region since records began 73 years ago. As the situation continues to worsen, more than 100 ships are queued to pass on most days and waiting times are now in excess of 15 days.

The extreme conditions have led to the ACP holding auctions to jump the queue and it has been widely reported that a fee of almost $4 million was recently paid by one shipowner to get to the front of the line, that's on top of the usual toll fee.

The extreme drought conditions have been hampering operations since May. Rainfall between January and April brought the lowest water levels in two decades and the situation has not improved.

Delays for Panama Canal crossings are mostly impacting North and South American West Coast services to and from the UK, as well as Asian services to and from the US East Coast.

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