The Panama Canal Authority announced it will reduce the number of vessels allowed to transit daily due to a severe drought caused by the El Niño weather phenomenon. Daily transits will be cut from the current 36 ships to 32, starting in September. This measure is being implemented to conserve water as rainfall in the canal's watershed has been significantly lower than average.
The restrictions on one of the world's most important maritime trade routes are expected to create delays and increase shipping costs. The reduction in traffic could lead to bottlenecks and force shipping companies to find alternative routes, potentially impacting global supply chains. The news has already contributed to a surge in shipping rates on the Asia-US West Coast route as shippers try to avoid the canal's constraints.