Historic drought slow Panama Canal shipping
Before the Ever Max ship could make its inaugural Panama Canal voyage this month, a historic drought forced it to drop weight by offloading hundreds of containers, according to Reuters.
Weather-related disruptions denied the vessel, owned by Taiwanese shipping company Evergreen Marine, a chance on Aug. 1 to set a record for carrying the most containers through the vital maritime shortcut that connects the Pacific and Atlantic oceans.
The Panama Canal Authority has reduced maximum ship weights and daily ship crossings in a bid to conserve water. Maritime transportation experts fear such events could become the new normal as rainfall deficits in the world's fifth-wettest country spotlight climate risks affecting the ocean shipping industry that moves 80% of global trade.
Ship owners have the options of carrying less cargo, shifting to alternate routes that can add thousands of miles to the trip or grappling with queues that earlier this month backed up 160 vessels and delayed some ships by as much as 21 days.
The restrictions already are sending China-U.S. spot shipping prices up as much as 36% amid soaring sea temperatures that climate scientists warn could supercharge extreme weather.
More than 14,000 ships crossed the canal in 2022. Container ships are the most common users of the Panama Canal and transport more than 40% of consumer goods traded between Northeast Asia and the U.S. East Coast.
Restrictions at the canal started earlier this year, affecting about 170 countries and virtually every type of good - including soybeans and liquefied natural gas from the United States, copper and fresh cherries from Chile, and beef from Brazil.
Bulk carriers that transport commodities from corn to iron ore, as well as tankers that move oil, fuel, gas and chemicals also are affected. Some energy companies are rerouting vessels laden with coal and liquefied natural gas to the Suez Canal.
A naturally occurring El Nino climate pattern associated with warmer-than-usual water in the central and eastern tropical Pacific Ocean is contributing to Panama's drought.
The area around the canal is experiencing one of the two driest years in the country's 143 years of keeping records, data from the canal authority and the Smithsonian Tropical Research Institute (STRI) showed. Rainfall measurements around the area are 30-50% below normal.
Water levels in Gatun Lake, the rainfall-fed principal reservoir that floats ships through the Panama Canal's lock system, have remained below normal despite accumulation from the current rainy season.
A potential early start to Panama's dry season and hotter-than-average temperatures typical of major El Nino events in the country could increase evaporation from Gatun Lake and result in near-record low water levels by March or April 2024, said STRI's Steven Paton.
Canal operators also cut the number of daily ship crossings to 32 from about 36 during normal operations since each passage requires about 50 million gallons of water, only a portion of which is recycled.
Some shipping executives are bracing for more reductions later this year, noting that in 2020 a less severe drought prompted canal operators to reduce crossings to 27 per day.
