The Panama Canal Authority has announced it will impose limits on the number of vessels allowed to transit the strategically vital waterway beginning in early September, as the El Niño weather phenomenon drives a worsening drought across Central America. Starting September 4, daily transits will be capped at 34 ships, falling further to 32 from September 15. The canal currently handles around 35 to 36 transits per day, against a normal capacity of approximately 40 vessels.
The Panama Canal, an 80-kilometre artificial waterway connecting the Pacific Ocean and the Caribbean Sea, handles roughly five percent of global maritime trade and approximately 40 percent of all US container traffic. The canal operates through a lock system that raises and lowers ships as they cross the isthmus of Panama, and depends heavily on freshwater drawn from nearby artificial lakes — most notably Gatun Lake. That same lake supplies drinking water to Panama City and surrounding communities, meaning drought places simultaneous pressure on shipping and on civilian water needs.
El Niño is a naturally occurring climate cycle that occurs every two to seven years, during which surface temperatures in the central and eastern equatorial Pacific Ocean rise above normal levels. The resulting shifts in atmospheric pressure, wind patterns and rainfall can trigger drought and extreme heat in some regions while causing flooding in others. Scientists warn that this year's El Niño is shaping up to be among the strongest on record. The severity of the situation is already visible across the region: Honduras placed 80 percent of its territory on drought alert this week.
The announcement marks a policy reversal for canal authorities, who said as recently as May that they had no plans to limit crossings in 2024, crediting water conservation measures introduced last year. Those measures included reducing the maximum draft — the permitted depth of a vessel's hull in the water — for larger ships. The new transit caps represent a more significant intervention.
The stakes are considerable for global supply chains. A severe drought in 2023, also linked to El Niño and accelerating climate change, reduced canal traffic by around 36 percent, causing widespread disruption to international shipping. Any sustained reduction in throughput is likely to slow delivery times and raise freight costs across industries that rely on the waterway, from energy and agriculture to consumer goods.