Panama Canal officials announced Wednesday they would reduce the daily number of vessels allowed to transit the shipping passage to 24, down from the average of 36 this time last year, amid severe drought conditions. Estimated losses from the cutbacks are expected to cost Panama nearly $700M this year and have domino effects on global shipping.
The 50-mile canal across the isthmus of Panama is one of the world's busiest trade routes, seeing roughly 5% of global maritime volume and 40% of all US container traffic, a total of roughly $270B in cargo annually (watch overview). First opened in 1914 to facilitate faster trade between the east coast of the US and Asia, the canal requires roughly 50 million gallons of fresh water for each of the 15,000 annual ships using its lock system. Track real-time ships here.
The reduction further strains global trade as the world's other major canal, the Suez in Egypt, sees drops in traffic amid escalating conflict in the Middle East.