Severe drought is constraining the Panama Canal

The Panama Canal provides a short cut between the Atlantic and Pacific oceans for 6% of the world’s maritime commerce. At its maximum capacity between 38 and 40 ships can pass through the canal each day. But over the past few months far fewer ships have made the voyage. The Panama Canal Authority (ACP), which allocates reservations, has slashed this number to 24. On December 1st it will go down to 22, and from February onwards only 18 ships will be able to cross each day.

Many of these slots are available to book well in advance at a fixed price, but a small number of last-minute options are held back and sold to the highest bidder. From November 1st, any carrier hoping to secure a slot within the next week has had to use the auction system.