Panama Canal to reduce daily ship traffic amid El Niño-driven water shortage

The Panama Canal Authority (ACP) informed shipping companies on Thursday that starting 15 September, only 32 vessels per day will be permitted to transit the canal, down from the current 36. The decision comes in response to reduced rainfall caused by El Niño, a periodic warming pattern in ocean surface temperatures that affects weather systems worldwide.

This year's El Niño is expected to be unusually strong, with climate change intensifying its effects further.

The shipping industry is already grappling with significant disruption elsewhere, as the war involving Iran has sharply reduced the number of vessels able to pass through the Strait of Hormuz.

The ACP said the new restrictions are meant to preserve reliable service and protect water resources needed for human consumption. It noted that although the rainy season has begun in Central America and water-conservation steps are already in place at the canal, further action is required to ensure the long-term sustainability of transit operations. The changes will be introduced gradually starting 3 September.

A vital trade artery

The Panama Canal dramatically shortens the time and distance ships must travel between the Atlantic and Pacific oceans. Roughly 14,000 vessels pass through the canal each year, which operates around the clock, every day of the year. Beyond its role in global trade, the canal is a major revenue source for Panama, generating about $3 billion annually.

In 2023, the ACP similarly cut vessel numbers during the previous El Niño episode, after Panama experienced its driest October since records began in 1950. Since then, the authority has introduced measures aimed at reducing water usage. Forecasts suggest this year's El Niño could rank among the strongest on record, with potential knock-on effects for weather patterns, food supplies and economies worldwide.