Bridge the Gap: How Industries are Adapting to the Panama Canal Drought

An unrelenting drought in the Panama Canal, one of the world’s major trade routes, has triggered transportation disruptions. Following the drought, the Panama Canal Authority (ACP) has restricted the number of ships allowed to pass daily, impacting up to 70% of the vessels passing through. These restrictions are expected to cause a $200M decline in the PCC’s 2024 earnings. Top industries expected to face the brunt include liquified petroleum, coal, and other dry bulk goods. With over 45M tons of vehicles passing through the canal annually, referred to as “roll-on-roll-off” cargo, the automotive supply chains will also be potentially impacted. Moreover, as the restrictions are expected to continue until late summer 2024, companies seek alternative shipping methods to lessen impacts.