Panama City — A severe illness that started last year has forced authorities to cut shipping lanes by 36% in the Panama Canal, one of the world’s most important trade routes.
The new cuts announced Wednesday by authorities in Panama are expected to deal an even bigger economic blow than expected.
Canal administrators now estimate that dipping water levels could cost them between $500 million and $700 million in 2024, compared to previous estimates of $200 million.
One of the worst droughts ever to hit the Central American country has fueled chaos in the 50-mile waterway, causing a traffic jam of boats, raising doubts about the canal’s reliability for inter-continental shipping. national and raising concerns about its impact on global trade.
On Wednesday, the Administrator of the Panama Canal, Ricaurte Vásquez, said that they will cut daily boat crossings to 24, after already cutting crossings last year from 38 a day in normal times.
“It is essential that the country sends a message that we are going to take this forward and solve this water problem,” said Vásquez.
Vásquez said that in the first quarter of the fiscal year the corridor saw 20% less cargo and 791 fewer vessels than in the same period of the previous year.
It was a “huge reduction” for the country, Vásquez said. But the official said that more “efficient” water management and a jump in water in November has at least allowed them to ensure that water levels are high enough for 24 boats to pass each day until the end of the year. April, the beginning of the next rainy season. .
Canal authorities attributed the drought to the El Niño weather phenomenon and climate change, and warned that it was urgent for Panama to seek new sources of water for canal operations and human consumption. The same lakes that fill the canal also provide water for more than 50% of the country of more than 4 million people.
“The water problem is a national problem, not just on the Canal,” said Vásquez. “We need to address this issue across the entire country.”