The Panama Canal Administration will limit the number of daily vessel transits from September due to a lack of rainfall amid the strengthening El Niño weather phenomenon, the Financial Times reports, writes UNN.
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The waterway, vital to global shipping, will allow 32 vessels to pass each day from September 15, compared with the current 36, the administration said on Thursday. The first reductions will begin on September 3.
The canal, which connects the Atlantic and Pacific oceans and handles more than 3% of global maritime trade, depends on freshwater to operate its locks, and there has been less rainfall than usual recently. Last month, restrictions were introduced that forced vessels to carry less cargo in order to cope with lower water levels.
The canal experienced a historic drought between 2023 and 2024 and reduced the number of booking slots for the first time. Water conservation measures have since been introduced, but on Thursday the administration said that low rainfall meant further action was necessary.
This year's El Niño, in which Pacific Ocean surface temperatures rise, potentially causing severe drought and warmer winters, could become one of the most intense on record. Leading climate scientists have called it a "super El Niño" and expect serious weather disruptions across several continents.
Global logistics companies are preparing for possible disruptions at the 110-year-old canal.
Canal transit prices reached record highs in August, averaging around $1.1 million, more than 16 times the average cost for the same period last year. The price surged after strikes against Iran by the United States and Israel began in February, leading to the closure of the Strait of Hormuz.
The authority said that from September 3 it would divide its daily auctions for transit slots into four categories depending on the type of cargo, in order to promote a fairer allocation. It will also give priority to vessels with the largest capacity in its larger Neopanamax locks. It strongly recommends that users book in advance.
The new resource-allocation measures were introduced after the canal sought to persuade liquefied natural gas and food commodity traders to return to the route following reductions in the number of slots in 2023 and 2024.
"If additional operational adjustments are required, the canal will provide customers with timely information," the authority said. "As weather conditions are changing more quickly than initially expected, the Panama Canal will make every reasonable effort to announce any future adjustments as early as possible," the statement said.
In addition to being vital to global trade, the canal is also an important source of revenue for the Panamanian government, generating nearly $3 billion in revenue in fiscal year 2025.
U.S. President Donald Trump criticized China's influence over the canal, promising last year to "take back control."
Danish shipping company Maersk and Swiss-based MSC took over operations at two key ports on the canal in February after Panama's Supreme Court annulled the contract with CK Hutchison, the Hong Kong-based operator. CK Hutchison is seeking more than $1.5 billion in damages.
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