Drought at the Panama Canal and the impact on supply chains

The Panama Canal announced shipping restrictions earlier this year due to a severe drought that has further reduced water levels in the lakes that supply the canal. As a result, authorities have had to limit the number of vessels and the amount of cargo they can carry, with only 32 ships currently authorised to transit every day, down from the usual 36. The maximum vessel draft has also been reduced to 44 feet from 50 feet. The canal connects nearly 2,000 ports in 170 countries, and these restrictions have led to long queues and shipping disruptions, however these are beginning to improve. 116 vessels are waiting to pass in Panama, down from over 160 in early August and according to official data, the maximum wait time has also been reduced to 14 days from 21 days a month ago. Concerns are growing, however, that the Panama Canal authorities could further reduce the maximum number of authorised daily vessel transits if the drought continues.

Click here to read more on the impact on shipping supply chains from Reuters.


Building preparing for climate change and building infrastructure resilience

The Panama Canal drought crisis exemplifies the impact of climate change on global supply chains and trade routes. The damage caused by extreme weather events, rising sea levels and higher temperatures can reduce productivity, cause supply shortages and harm transport infrastructure. The World Trade Organization’s Trade Facilitation Agreement aims to make supply chains more resilient by improving transparency and streamlining processes. The Global Alliance for Trade Facilitation is a coalition that supports these efforts.

Click here to read the story from the World Economic Forum

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