Panama Canal Enforces Restrictions Amidst Drought Conditions

Global drought conditions have begun to impact the largest shipping channels in the world. The Panama Canal, which handles roughly 40% of U.S. container traffic, has ships starting to back up. Restrictions have caused the canal only to be able to pass a certain amount of shipping traffic safely. The reduction means less than 34 ships can move through the canal in both directions each day, compared to 42 that could previously pass.

The announcement comes after a ruling in June to reduce the maximum draft for new-Panamax vessels by 6 feet. Restrictions are in place through August 21 and will likely force certain companies to find alternative routes. The U.S. is the largest user of the canal, accounting for 73% of the commodity export and import container traffic.

Read more about the ag transportation through the Panama Canal here.