The rainy season in Panama usually begins in May and ends in November each year. The year 2023 has experienced severe drought, exacerbated by the presence of the El Niño phenomenon, which continues to affect rainfall in Gatun Lake and inflow of tributary rivers. October has been the driest month for the same period since 1950 with the lowest recorded precipitation (41% below).

Currently, the Gatun reservoir receives a daily inflow from rainfall and river flow amounting to seven hm³. However, the combined outflows from Canal operations, evaporation, human consumption, and industry amount to ten hm³. This results in a daily deficit of three hm³. In a year with typical rainfall, the water inflow would average 15 hm³ per day. This means that for the year 2023, water consumption has surpassed Gatun Lake intakes from rainfall and rivers, hence the Canal has had to maintain acceptable levels for operations through water accumulated during last year’s rainy season and transfers from the Alhajuela lake.

I. Water-saving strategy

Since 2020, the Panama Canal Authority (ACP) has been working on water conservation to guarantee freshwater resource for the next 50 years. With less than two months left until the end of the 2023 rainy season, the Canal and the country face the challenge of the upcoming dry season with a minimum water reserve that must guarantee supply for more than 50% of the population and, at the same time, maintain the operations of the interoceanic waterway. Thus, the Panama Canal upholds its commitment to the nation, aligned with one of its core strategic objectives: to ensure the availability and quality of freshwater for both, Canal operations and public consumption. The Panama Canal fulfils its constitutional responsibility to manage freshwater resources for human consumption and provide efficient service to global maritime trade through a transparent and sustainable approach.

II. Water-saving measures

According to the ACP, it takes around 50 million gallons of freshwater to move a vessel through one of the locks. The Panamax locks lose more water compared to the Neo-Panamax lock. To alleviate the current freshwater scarcity, it would require an extreme storm or a hurricane. However, such events are unpredictable and undesirable from other standpoints. The ACP has thus adopted several water saving and conservation measures in the transit operation.

One of the implemented measures is cross-filling in the Panamax locks. This manoeuvre involves reusing water from one lock chamber for use in the other, saving 50% of the water in each lockage.

Additionally, the use of water saving basins in the Neo-Panamax locks is maintained, allowing the rescue of 60% of water in each lockage.

Whenever the size of the vessels permits it, two vessels can transit at the same time. In order for this lockage to be done safely, the sum of the combined length of both vessels must not exceed 825 feet (approximately 251 meters). This action saves 100% of the lockage of a vessel in the Panamax locks.

Furthermore, the transit schedule has been optimized to maximize water savings in each chamber and accommodate the highest number of vessels. In the Neo-Panamax locks, the direction and scheduling of transits are analyzed to make the most of every drop of this resource. Starting November 1^st, the average transits through the Canal will be adjusted to 31 vessels per day: nine through the Neo-Panamax locks and 22 through the Panamax locks.

The use of inner gates consists of making the airlock using one of the upper chamber’s interiors, reducing the amount of water required to fill it. In the Panamx locks, the use of this system accepts vessels up to 800 feet (244 meters) in length, saving 2 million gallons of water per day per lockage, while the Neo-Panamax accept vessels up to 1,050 feet (320 meters), saving 6.5 million gallons of water per lockage.

Power generation at the Gatun hydroelectric power plant has been suspended since October 2018 to avoid using water from the Gatun Lake through the turbines.

III. Traffic restrictions

Despite all measures taken, the level of Gatun Lake has continued to decline to unprecedented levels for this time of year. Based on the rainfall projections for the following weeks, which as of today is expected to be 38% less for the rest of the year, the ACP finds it necessary to further reduce the daily transit capacity to postpone the need for additional draft reductions below the current 13.41m (44 feet) TFW.

Therefore, from November 3, 2023, to November 6, 2023, the number of booking slots will be reduced to 25, and from November 7 to November 30, 2023, the number of booking slots will be reduced to 24.

In addition, from December 1 to December 31, 2023, the number of booking slots will further be reduced to 22, and from January 1, 2024, to January 31, 2024, the number of booking slots will be reduced to 20.

For booking dates beginning February 1, 2024, and until further notice, the number of booking slots will be reduced to 18 per day.

The number of slots is based on the present and projected level of Gatun Lake for the following weeks. Further adjustments in the daily number of transits will be announced depending on the rainfall in the Canal watershed and level of Gatun Lake. The ACP strongly encourages vessels to make use of the Transit Reservation system in order to guarantee a transit date and to reduce the possibility of extensive delays.

IV. Impact on shipping

According to MarineTraffic, wait times have increased on the Atlantic side from last week on average by 30% (0.4 days to 0.6 days) and on the Pacific side, wait times have increased to 2.2 days. “With a reduced transit schedule and an average of 26 daily arrivals by commercial ships per day on the Pacific side of the canal, and an average of 8 daily arrivals by commercial ships per day on the Atlantic side of the canal, the likelihood of cargo waiting idle will increase,” said Captain Adil Ashiq, head of North America for MarineTraffic.

Containerships have priority in crossing the canal due to their contracts. The most impacted vessel types are wet bulk and dry bulk vessels. The delays are leading shippers sending cargo to U.S. East Coast and West Coast ports to make alternative plans. A shipping company executive said they have paid 400,000 U.S. dollars in August this year for a vessel to skip the line, which doubled the cost of transiting the canal. Shippers are now paying up to 2.4 million U.S. dollars per vessel to beat a logjam of carriers waiting to sail through. The costs are on operators who are trying to secure contracts for the next voyage, and some will be later passed on to the inflation-affected consumers.

For more information, please contact Managers of the Association.