# Panama Canal Announces Shipping Reductions Amid El Nino-Induced Drought

*The Panama Canal will cut the number of ships passing through it starting next month due to drought caused by the El Nino phenomenon.*

August 21, 2026 · World

## At a glance

- The Panama Canal will reduce daily ship transits from 36 to 34 starting September 3.
- Water levels in the canal's artificial lakes are low due to El Nino-driven drought.
- The reduction could increase shipping costs and delivery times globally.

The Panama Canal will reduce the number of ships passing through it starting next month due to a drought caused by the El Nino phenomenon, the operator of the strategic waterway announced. From September 3, the number of vessels allowed through each day will fall from 36 to 34 due to low water levels in two artificial lakes that feed the canal. It will drop to 32 from September 15 onward. The Panama Canal handles five percent of global maritime trade and around 40 percent of US container traffic.

## Impact of El Nino on Central America

Central America is experiencing a severe drought driven by El Nino, a weather pattern that warms surface temperatures in the central and eastern equatorial Pacific Ocean, triggering worldwide changes in winds, atmospheric pressure, and rainfall. In the area of the canal, rainfall from May to August is down by 34 percent from its historical average, and El Nino could reduce it even further. The canal's operator has already implemented other water conservation measures, such as lowering the maximum draft for the largest ships.

## Economic and Logistical Implications

The reduction in ship transits will increase waiting times for ships trying to get through without making a reservation beforehand. Nine out of ten ships using the canal do so with a reservation, and the remaining slots are auctioned off. In April, one shipping company paid a record $4 million to use the canal, highlighting the urgency and cost of securing passage during this drought. The canal's main users are the United States, China, Japan, Chile, and South Korea.

## Long-Term Sustainability and Future Projections

The Panama Canal Authority said that "lower than forecast rainfall in the canal's watershed" called for measures to bolster the "long-term sustainability" of the waterway. It does not rule out further restrictions on shipping depending on how much it rains in the coming weeks. The US-built canal's main users are the United States, China, Japan, Chile, and South Korea. Water is a critical issue in Panama because the lakes that feed the canal also provide water for half the population of 4.2 million people.

## Why This Matters for Bangladesh

The reduction in shipping through the Panama Canal due to drought could have significant implications for global trade routes, potentially increasing shipping costs and delivery times for goods. Bangladesh, which relies heavily on maritime trade for its economy, could face higher import costs and delays in the arrival of essential goods. This situation underscores the vulnerability of global supply chains to climate-related disruptions and the need for adaptive strategies to mitigate such impacts.

## Sources

- BSS

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Source: https://pulsetoday.com.bd/en/world/panama-canal-reduce-shipping-el-nino-drought