Drought Cuts Daily Panama Canal Traffic By 1/3; Large Gas Carrier Rates $250/ton & Climbing

[hatrack]

A drought is limiting ship traffic through the Panama Canal. The resulting delays caused shipping rates through the Panama Canal for Very Large Gas Carriers (VLGCs) to reach record highs, which increased the cost of shipping liquefied petroleum gas (LPG) from the United States.

According to the Panama Canal Authority (APC), water levels at Gatún Lake are the lowest since at least 1995 as a result of an extended dry season and lower-than-normal precipitation on the Panama Canal. Gatún Lake is the artificial lake that vessels pass through to transit between the Atlantic and Pacific locks, and it holds the water supply needed to operate the lock systems of the canal.

In response to the low water levels, the APC enacted transit restrictions to conserve water beginning in January 2023. The number of vessels allowed to transit the canal was limited to 32 per day on July 30 and will be further restricted to 24 per day on November 7, down from its typical 36 per day. The transit restrictions have resulted in long delays; in August, more than 160 vessels had to wait to transit the canal.

VLGC rates have reached record highs because of the delays at the Panama Canal. Rates for VLGCs, which carry primarily propane (and, to a lesser extent, butane), on the Houston-Chiba (Japan) route reached $250 per ton for the week ending September 29, the highest since rates were first published in 2016. The Houston-Chiba route usually passes through the Panama Canal because it takes nearly half the time compared with going across the Atlantic and through the Suez Canal.

EDIT

https://climatecrocks.com/2023/10/31/panama-canals-drought-bottleneck-continues/

[Vogon_Glory]

1. Lest we forget: Right-wingnutz screaming about the Panama Canal Treaty

I think it behooves us to remember the right-wingers screaming about the end of the Panama Canal Zone and surrender of US control over the canal during the Carter administration.

Then, as now, there were too many cargo ships too large to use the Canal even when there wasn’t a drought. Then, as now, there were too many US naval vessels too large to use the canal even when there was no drought.

The Panamanians did eventually built locks to accommodate larger vessels. However, because of the drought, many of those ships are finding access to the canal difficult or outright impossible.

The end of the Canal Zone ended a long-standing US diplomatic irritant with Latin America. We good guys need to remember stupid right-wing (stuff) and call them on it.

I suspect that traffic on ocean-to ocean rail lines is going to pick up in Panama and elsewhere in Mexico and Central America.