US holiday season and the Panama Canal drought (August 2023)

You might already be looking forward to holiday season, including Black Friday and Christmas. However, did you know that thousands of miles away, a severe drought in the Panama Canal is setting off a chain reaction that might just dampen your festivities? 

The Panama Canal, a vital global trade route connecting the Atlantic and Pacific oceans, has been at the heart of international commerce since 1914. It serves more than 144 maritime routes linking 160 countries. In 2022, more than 14,000 vessels and nearly 520 million tonnes of cargo travelled through the Panama Canal–the major waterway connecting Asia and the Americas. The Panama Canal has 46% of the total market share of containers moving from Northeast Asia to the East Coast of the United States.  

However, 2023 has been one of the driest years on record in Panama. Unusually high temperatures and the influence of El Niño (associated with warmer ocean and air temperatures) are playing a significant role in this drought. Low water levels have disrupted the smooth flow of goods through the Canal. Ships laden with goods, including your gifts and seasonal delights, are encountering unexpected delays and surcharges.  

The drought has led to unprecedented restrictions along the Panama Canal, including reduced crossings and restrictions on ship loads. This has resulted in delays and extra fees for shipping companies relying on this route, with waiting times of over two weeks for  vessels even meeting the lighter weight limits. The trade slowdown affects global supply chains and increases shipping costs. For instance, sending a 40ft container from China to the US Gulf Coast via the canal on short notice has seen a 36% cost increase. The additional fees incurred are passed on to consumers. These restrictions, set to continue into 2024, are affecting shipping routes essential for peak shopping seasons like Black Friday and Christmas. 

The dry Panama Canal might affect every aspect of your holiday season. Beyond shipping concerns and longer delivery times due to the restrictions, it is likely to also increase prices. Additionally, many fruits and treats that are part of your holiday feasts are sourced from South America and rely on timely passage through the canal.  

As we gear up for the holiday season, let’s remember that the products we enjoy and the traditions we hold dear are all part of a delicate, global web. The Panama Canal drought isn’t just a distant issue, it is a call to action. It’s a reminder that the choices we make and the impacts of climate change are intertwined with our daily lives. By being aware of the largely unseen ripples of this global phenomenon, you can join a collective effort to make a difference. For instance, protest at your local government for carbon cut-down, reduce unnecessary consumption and do not participate in Black Friday deals. Find out more about solutions. 

Read more about extreme weather here.

Read more about the socioeconomic risks of climate change here.