Panama Canal's low water levels could become headache for consumers - ABC News
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Low water levels at the Panama Canal are causing a traffic jam at the historic trading route that connects the Atlantic and Pacific Oceans, threatening to ensnarl the holiday shipping season and raising alarm among canal officials.
The 109-year-old canal works through a water lock system that move ships up or down as they make it to the other side. Each ship that goes through the canal uses millions of gallons of water that gets sucked in from nearby lakes. Without this fresh water, the canal can't operate.
There's always been enough rainfall flowing to these lakes, but this year a longer dry season and a shorter rainy season have led to a shortage of freshwater to feed the canal, according to canal officials.
ABC News foreign correspondent Matt Rivers spoke to "START HERE" about his visit to the canal, how authorities are instituting new rules to help conserve water and concerns about the potential impact on supply chains and consumer prices.
BRAD MIELKE: Remember when the Suez Canal in Egypt backed up because of a boat accident, basically? Hundreds of ships patiently lined up for days while the world's freight traffic just stopped?
Well now, a similar situation is playing out closer to home. The famed Panama Canal is now home to the planet's biggest traffic jam, but this time it's not because of a ship, but because of the water.
ABC's foreign correspondent Matt Rivers is on the ground in Panama right now. Matt ,maybe I should have said not water, it's a lack of water, right? What's happening?
MATT RIVERS: Yeah, that's exactly right. So basically, you have the Panama Canal. Everyone knows that it connects the Pacific Ocean to the Atlantic Ocean. And right now, there are huge delays. You can enter the canal from either the Atlantic or the Pacific, and we took a boat out on to the Pacific the other day and there are just ship after ship after ship stuck waiting.
And the reason why has to do with the way this canal is structured. So, basically, the way this works is that as you enter one side, a series of locks, so think of them as like water elevators - they have to move ships either up or down as they make it to the other side.
In order to do that, the canal sucks water in from nearby lakes. These are freshwater sources. So basically, it's rainfall that comes down, feeds the rivers, the rivers feed down into the canal.
A cargo ship navigates through the Panama Canal in the area of the Cocoli Locks, in Panama City, Aug. 25, 2023.Ivan Pisarenko/AFP via Getty Images, FILE
Each ship that goes through the canal uses about 55 million gallons of water, most of which then gets flushed out to sea as the ship makes its way through the canal. In a place like Panama, which is one of the wettest countries in the world, that has never really been a problem - until now, because when you think about what I just said, you have to have a lot of fresh water.
Well, what happens this year? From January to about March, April, I would say, is typically the dry season in Panama. But that dry season was extended by a few months this year where they didn't get the amount of rain they needed. It was hotter, a more extended dry season. And when the wet season started, let's say around June until now, it's been a less wet than usual wet season.
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Basically, with all that adds up to is that there's less fresh water. The levels in the canal are much lower than where they need to be, and so as a result, canal authorities have less water to work with when they're moving each one of these ships through.
They've had to implement water saving, water conserving measures. So what that's meant is that not only are they allowing less ships to go through the canal every day, from 36 on average down to about 32 on average, but each ship also has weight restrictions now.
They have to actually have less cargo on board. So what that means is delays. The number of ships that are going through each day is less, but the number of ships arriving same as ever before, and so that's why on both sides, in the Atlantic and the Pacific, you've got ships waiting. Right now, we're approaching about 150 ships, more or less waiting to transit through.
MIELKE: So how bad is that? Like, what does that mean for consumers, I guess? Like, how bad is it getting as far as the shipments?
A cargo ship navigates through the Panama Canal in the area of the Cocoli Locks, in Panama City, Aug. 25, 2023.Ivan Pisarenko/AFP via Getty Images, FILE
RIVERS: Sure. So, basically, think about what these ships carry through. It's everything from consumer electronics to raw materials used to make other goods. The shipping companies, the companies that are paying for these shipments, they incur more fees. The longer these delays go on, ultimately, their costs go up. And as we saw during the pandemic, what happens when companies incur more costs? Do they eat it in the public good? No.
Generally speaking, they say let's just pass those costs right along to the consumer. And that is the fear here. We're not really seeing that yet, but this is the start of the peak season for shipping. And it might I mean, don't get mad at me for talking about Christmas this early. I'm not someone who likes to see Christmas trees in Target this early, but these shipping companies are thinking about Christmas.
So there could be delays in those goods getting to stores, and you could see prices go up a little bit as a result. Again, we're not seeing that now, but if these companies decide to pass costs incurred here at the Panama Canal on to your average American, then you could see prices go up.
That said, let me just say, this is not going to be, at least for now, as bad as the kind of supply chain issues that we saw during the global pandemic.
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MIELKE: Well, and I guess this raises this larger worry, which is like, if there's a boat accident there, that can get fixed in a day. If there's part of the canal is destroyed, you could reconstruct that in a week or a month or whatever. Droughts can last for years, Matt. So what happens going forward if the problem is just how much it rains in a country?
RIVERS: Yeah, and those are the questions that we posed to Panama Canal authorities, and they're taking it one step at a time.
During the wet season, which is where we are now, that's when normally the feeder system for this canal fills back up. So when dry season comes around again in the early part of next year, they've got enough water to work with, they get through the dry season, then the wet season comes again and everything is OK. But if the wet season doesn't fill back up their supplies enough, then they're going to be starting off next year on the back foot.
Without fresh water, this canal cannot operate. It's that simple. So what keeps the authorities here at the Panama Canal up? The long-term viability of the canal. If they don't get more fresh water, then they can't operate the canal the same way they have since it opened more than a century ago.
We're not there yet. We don't hope, no one hopes, we get to that point. But these are the kinds of conversations that are being had here at the Panama Canal within the official community that have literally never happened before.
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Currently, there are around 160 vessels in the queue waiting to transit the canal. Various restrictions have been put on the ships, more notably a weight restriction, lowering the number of containers they can have on board.
The canal operates on fresh water and right now and in the foreseeable future the Canal Commission believes it will take 8 months to clear up the back log and that is only a guess. The longer the drought the more the congestion and the longer to clear it up.
What that means to the American consumer is a shortage of some products and higher prices.
Some of the cruise lines have canceled their ''Panama Canal'' season due to the congestion.
flushing 55 million gallons of fresh water into the ocean with every ship passing thru doesn't sound very sustainable. what were they thinking not to build the canal with a redundant pumping system, or some kind of plan b. wtf?
That's a great point, devan. Not being an engineer I would think that there must be a more sustainable way to move the vessels. It wasn't long ago that the canal was enlarged to handle the post-panamax vessels and the systems seem to have stated the same as before.
I know that land on each side isn't the same level and the topography is prone to landslides thus the locks and freshwater but beyond that I don't really know the physics of it.
Pump it from where? If you pump it from below the lock you remove the water necessary to float the ship high enough into the next set of locks, the Panama Canal is a river and you can't pump it in from the Pacific or Gulf of Mexico, if you did you would spoil the lake killing it and the water source for the people living there. I wonder just how long it would take to pump 55 million gallons of water. It seems if you get the power to do this from a dam you would need to run through 10 gallons to lift 1 gallon so that isn't feasible either that would just drop the lake level even faster.
How much can some of this traffic get diverted to other ports? Of course that too will have consequences.
Since it's from the Far East the only other ports would be the West Coast which can handle any size vessels, but it will create massive congestion and then you have the problem of getting the container to the East Coast. The vessels and trains are set up for a totally different move.
You'll have cargo/containers at the East Coast ports waiting to be loaded on the vessels that have now been diverted. The problem gets bigger and bigger.
In other words, I doubt if you see anything being discharged on the West Coast that has an East Coast destination.
at what point does the cost of fuel and time involved will it be more productive to go around either horn, africa or south america?
I wonder how this will affect US aircraft carriers transiting the canal, especially the newer and larger Gerald Ford Class carrier?
The new rules on draft is 43 feet, the Ford class carriers are 39 foot draft so she is good to go.
Most likely that 39 foot draft was deliberately included into the design specs just for the Panama Canal transit.
Not sure, Doc. It usually is based on Deadweight tonnage and the ships boyency. With container ships, it can vary greatly if they are fully loaded with containers or half full or empty. I would guess with an AC the only difference would be if it has a full compliment of planes on board.