Low Water Levels in Gatun Lake and the Panama Canal
In 2023, the Gatun Lake (the larger of two lakes servicing the locks of the Panama Canal) experienced water levels below seasonal norms due to insufficient rain during the year. The lowered water levels can be seen in Figure 3-13. For reference, the location of the Panama Canal is shown in Figure 3-14. Gatun Lake water levels have hovered close to 80 feet since June of this year, while more typically, the rainy season ends in November with levels in the Lake at about 88 feet. [1] As a result of the lower water levels in the Lake, Panama Canal Authority has had to restrict ship transits and draft. For example, container vessels would normally draft 50 feet, but since the summer, they have been restricted to drafting 44 feet. Drafting less than 50 feet means the locks do not have to be completely full, therefore reducing Gatun Lake water consumption. [1]
Further restrictions on the number of transits through the 2023-2024 Winter have also been announced, and per the Authority’s ‘Advisory To Shipping No. A-50-2023’ dated November 24, 2023 [1]: “While the current water deficit persists in the Canal watershed, the Transit Reservation system is the only mechanism available to guarantee a transit date. Therefore, vessels without reservation may experience indefinite delays.” More information can be found about this developing situation at the Authority’s website. [1]
This situation may impact the flow of goods to the United States, as ships without reservations with the Authority could be delayed. Ships have taken alternative routes and methods to reach the US, including sailing around South America, participating in special transit auctions through the Authority, or choosing other routes altogether. For instance, to reduce the draft, some carriers have opted to have containers unloaded onto rail, shipped across Panama, and re-loaded onto the ship after the ship transited the canal. [1] [3] Additionally, as quoted on November 9th in FreightWaves, Peter Allen, Chief Financial Officer of Genco Shipping & Trading noted on a conference call that “Instead of going through the Panama Canal, ships are going through the Suez (Canal), which is extending ton-miles. Ton-miles is shipping demand measured in volume multiplied by distance.)” [3] This increases the cost of importing US agricultural products in other countries, and shifts the volume and location of imports and exports between port gateways.
Footnotes
[2] Panama Canal Authority, Lake-Reservoir Elevation Dashboard as of November 6th, 2023. https://panama.aquaticinformatics.net/Data/Chart/ChartId/3/Interval/Custom/2022/09/11/2023/10/12