Drought, Shipping, and the Panama Canal's Impact on the Supply Chain

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Written By Jennifer Joslyn

🇵🇦 Drought, Shipping, and the Panama Canal's Impact on the Supply Chain.

Panama has been experiencing an extended period of drought, with no signs of improvement in the coming weeks or the rest of the spring season. The impact of low rainfall is being felt at the Panama Canal, a crucial route for global maritime trade, which typically handles about 6% of the world's trade. Due to the water scarcity, vessel restrictions have been imposed, resulting in reduced cargo capacity and fewer goods being transported through the canal. Unfortunately, the forecast does not indicate any significant improvement in the short or long term, and the situation may worsen as lake levels continue to decrease. Additionally, the potential transition to an El Niño event raises concerns about even drier conditions in Central America.

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Jennifer Joslyn
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