The Panama Canal Authority will cap the number of ships crossing the waterway from early September, citing falling water levels in the lakes that feed it as the developing El Niño drives drought across Central America.
The authority, which oversees the canal, announced the measures on Thursday. Daily transits will fall from the current 36 vessels to 34, and drop again to 32 from September 15. The outlets differ slightly on when the first cut takes effect: NewsFirst reported it applies from September 3, while Al Jazeera put the first 34-ship day at September 4.
The canal handles roughly 5% of global maritime trade and can normally accommodate about 40 vessels a day. Since June it has averaged 35 transits daily.
A reversal of position
The restrictions mark a change of course for the authority. Officials told Reuters in May that they had no plans to limit crossings this year, pointing to water conservation measures introduced the previous year, Al Jazeera reported.
The canal works through a lock system that raises and lowers ships as they move between the Pacific Ocean and the Caribbean Sea. It is fed partly by freshwater from nearby lakes and reservoirs, most notably Gatun Lake — which also supplies drinking water to Panama City and other nearby urban areas, adding strain during dry spells.
The precedent is recent. A severe drought in 2023 cut traffic through the canal by roughly 36%, disrupting global supply chains.
Why it matters for Sri Lanka
Any sustained reduction in transits slows shipping for industries that depend on the route and tends to push costs higher.
For Sri Lanka the timing is awkward, because the canal is now being squeezed from two directions at once. Traffic through Panama had been running unusually heavy this year after the closure of the Strait of Hormuz pushed Asian refiners toward US oil and gas, driving last-minute transit bids past USD 4 million for a single LNG vessel in April. Daily transits climbed from 34 in January to 37 in March on that rerouted demand.
Capacity is now being cut into that elevated demand rather than into a slack market. Higher freight rates on long-haul routes feed through to the landed cost of imports at Colombo, compounding pressure on fuel, food and consumer goods already reflected in July’s inflation figures.
The restrictions stem from the same weather event now dominating Sri Lanka’s own outlook. Britain’s Met Office said on Friday the developing El Niño is likely to be the strongest in living memory.
NewsFirst carried the report in Sri Lanka; the account originates with Al Jazeera, and the two versions are substantially the same copy.
