Panama Canal to Cut Crossings as El Nino Drought Lowers Water
Panama Canal plans to cut ship traffic again as drought linked to El Niño reduces water availability.
A draft plan submitted to Panama's parliament would allow an average of 29.5 vessels to transit daily from October, down 18% from 36 in August, according to The Guardian. Officials had already cut daily transits from 36 to 32 in September. The proposal is not yet in force. Submission to parliament is the procedural step before implementation.
The canal handles 5% of global maritime trade and about 40% of US container traffic. For fiscal year 2026, which runs from October to September, the waterway averaged 34 to 35 daily transits, according to Reuters. The October target would sit well below both the August level and that yearly average.
The constraint is water. Queues are building. In August, vessels waited 10 days to enter, the longest wait since May. The 82km waterway connects the Caribbean Sea to the Pacific Ocean. Its locks lift ships 26 metres (85 feet) from sea level to Lake Gatun. Each lockage uses fresh water.
That water use explains why El Niño, a climate pattern that shifts rainfall, hits the canal. In 2023, authorities cut daily transits from 38 to 22 because of low water. El Niño is now expected to peak later in 2026 and is forecast to be the strongest in four decades. The drought affects the reservoir system and water availability, according to the Panama Canal Authority.
Gatun Lake is the principal water reservoir of the system, according to the Panama Canal Authority. Deepening Gatun Lake is intended to reduce draft restrictions during long droughts. Draft determines how heavily a ship can load and still pass. Transit numbers control how many ships pass. Authorities are now adjusting that second control, much like letting fewer trucks use a toll road instead of limiting the load on each truck.
The broader context here is management of a shared chokepoint under climatic stress. Slot cuts spread delay across carriers, while draft limits concentrate cost on bulk ships and laden container transits. Panama has used both tools in past dry cycles. Routing the October reduction through parliament signals the domestic political weight of decisions that touch toll revenue, water supply and contractual reliability.
Looking at what this means for operators and governments, the sequence matters more than any single number. September tightened to 32. October would tighten further to 29.5. The forecast peak still lies ahead. If rainfall does not recover around Gatun, shippers face extended lead times, auction pressure for reserved slots and diversion choices. The question is not whether the canal can operate, but at what throughput and with what predictability through the peak period.
