‘World’s Worst Traffic Jam’ Has 150+ Cargo Ships Stuck at Panama Canal

A historic drought has limited the ability to adjust water levels to allow ships to pass through the vital shortcut.
Idle cargo ships scattered in the ocean outside the Panama Canal (left) a container ship traverses locks in the Panama Canal in 2010 (right)
@Rainmaker1973 on Twitter (left), Wolfgang Kaehler via Getty Images (right)

More than 160 cargo ships and counting are stalled at the Panama Canal as the route’s water supply is throttled by the worst drought in more than 70 years. The disruption could reportedly drive up prices of imported commodities (including groceries) for weeks, and possibly longer if Panama continues to struggle with water supply.

The Panama Canal is a crucial shipping route between the Atlantic and Pacific oceans, saving weeks of travel time and therefore money. The shortcut sees $270 billion worth of cargo a year and handles about 40 percent of U.S. container traffic according to Yahoo! Finance.

However, the canal’s capacity in recent weeks has been capped by the worst drought in decades. The Panama Canal fills its locks using fresh water from Gatun Lake, which is also Panama City’s source of water. Each ship transit requires about 50 million gallons, only some of which is recovered. Droughts in the region are normal and are reportedly expected every five years.

But this one’s ahead of schedule, coming only three years since the last drought, and it’s worse than expected too: Panama has reportedly recorded its driest year since 1950. Because of its tight water supply, Panama has reduced the number of daily trips from 36 to 32 through at least September 2. Low lake levels mean ships also have to be lighter to make the passage. Some ships have been delayed by up to three weeks as a result, leaving more than 160 ships awaiting passage as of August 22.

The slowdown is causing a drastic increase in container shipping times along some routes, as well as increases in pricing. U.S. consumers are expected to feel the impact in the prices of some imported goods for at least as long as the shipping limitations will. But they could also extend as long as Panama’s water shortage, however long it lasts.

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