The Panama Canal, which is an essential route for global trade, is facing challenges due to an ongoing drought in the region. The canal operates by using water from freshwater reservoirs to lift large cargo ships through a system of locks.
However, the severe drought has caused a decrease in water levels, leading the canal authority to implement surcharges and weight restrictions on ships passing through. As a result, the number of ships using the canal is expected to decrease from the usual 36-38 per day to around 30-32 as they adopt water-saving measures.
This reduction in traffic is likely to impact the canal’s revenue, with expectations of a €182 million drop in the upcoming fiscal year starting in October. Furthermore, there are concerns that the situation may worsen as the region is experiencing an extended dry season, potentially leading to the onset of El Niño weather phenomenon and further exacerbating the conditions.