'Strongest in living memory' El Niño forces Panama Canal shipping cuts

The Panama Canal Authority (ACP) is set to implement significant restrictions on daily ship transits starting in September, in response to severe drought conditions exacerbated by the intensifying El Niño phenomenon. The strategic waterway, which handles a substantial portion of global maritime trade, has experienced significantly reduced rainfall, with levels from May to August reportedly 34% below the historical average and watershed inflows plummeting by 44%. This water shortage has led to critically low levels in the artificial lakes that supply the canal's lock system.

Effective September 3, the number of daily vessel crossings will be reduced from the current 36 to 34. A further reduction will take place on September 15, limiting transits to a maximum of 32 ships per day. These measures follow earlier restrictions on vessel draft, which dictates a ship's maximum permissible depth in the water, and represent a change from the ACP's earlier position not to limit passages this year.

The anticipated severity of the 2026-2027 El Niño event, projected to be one of the strongest on record, underscores the long-term challenges to the canal's operations and local water supplies. The new transit limits are expected to increase waiting times for ships without reservations and could lead to higher shipping costs for companies.