Panama Canal to limit shipping ahead of extreme weather during El Nino

The Panama Canal is expected to limit traffic starting in early September, as it prepares for lower water levels due to the El Nino weather phenomenon.

On Thursday, the Panama Canal Authority, the body that oversees the waterway, announced that daily transit caps would be set to address concerns about the drier weather conditions ahead.

Under the new measures, 34 vessels will be permitted to sail through the canal as of September 4. A further reduction will start on September 15, when the limit will be 32 ships.

The travel restrictions are a reversal for the Panama Canal Authority. Officials told the news service Reuters in May that they had no plans to limit crossings this year, citing water conservation measures imposed last year.

The canal, which handles about 5 percent of global maritime trade, usually has capacity to accommodate about 40 vessels per day.  Since June, it has seen a daily average of 35 transits.

Any significant decrease in travel through the canal is likely to translate into slower international shipping for industries that rely on the waterway. That, in turn, could increase costs.

A severe drought in 2023, for instance, cut traffic through the Panama Canal by roughly 36 percent, leading to disruptions in global supply chains.

The declining water levels that year were also attributed to El Nino, as well as climate change accelerated by human activities.