Panama Canal Water Levels Declining Due to Drought

A recent report shows that the drought affecting the Panama Canal has hit the dry bulk and LNG shipping segments hardest. Container xChange also noted that the effects of the Panama Canal drought are expected to persist throughout 2024.

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The Panama Canal's draft was last increased in 2016, when the maximum draft level was raised to 50 feet.

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Due to the drought, the maximum draft has been reduced from 50 feet to 44 feet, with each foot of draft reduction resulting in the loss of 400 TEU capacity. As a result, an average container vessel can now carry 2,400 TEU less.

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In response to the ongoing crisis, carriers have begun rerouting shipments to the U.S. West Coast or opting for alternative routes via the Suez Canal. Container xChange noted that this shift could impact transportation costs, delivery times, and supply chain efficiency for U.S. businesses.

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2023-12-01

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Source: https://www.supplychainbrain.com/articles/38608-panama-canal-water-levels-will-affect-western-trade-in-2024