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Panama Canal Authority to Reduce Daily Ship Transits Due to Severe El Niño Drought

The Panama Canal Authority announced that it will reduce the number of vessels allowed to pass through the strategic waterway starting next month. Beginning September 3, the daily ship count will drop from 36 to 34, and will further decrease to 32 by September 15. These restrictions are necessary due to low water levels in the artificial lakes that feed the canal, caused by a severe drought driven by the El Niño weather pattern. Central America is currently experiencing a wet season that is significantly drier than historical averages, with rainfall between May and August being 34% below the norm. The canal handles approximately 5% of global maritime trade and 40% of US container traffic. To maintain long-term sustainability, the authority has also implemented a 48-foot draft limit to reduce the weight of cargo ships. These measures are expected to impact global supply chains and consumer prices, as shipping companies face increased costs and potential delays. The canal remains a vital economic artery for the US, China, Japan, and South Korea.

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