Is The Panama Canal Doomed?
Consider this. Shipping companies that cannot get their ships through the drought-damaged Panama Canal now send them via the Cape of Good Hope, which adds 12 days in transit to Asia, or the Suez Canal, which adds 10 days. The cost of the additional miles traveled is staggering. Despite the additional time, these shipping companies have no choice. As the backlog of ships waiting to enter the Panama Canal grows, these new routes may become the primary ones. The usefulness of the Panama Canal will start to disappear.
According to Bloomberg, James Allen, vice president of liquefied natural gas chartering and operations at Cheniere Energy Inc., said recently, “I sleep better at night knowing that I am going around the cape or Suez and not waiting in line, especially when it starts to be really desperate and you pay $4 million.” The cost of delayed delivery of goods is unknown. The cost to get a preferred spot to go through the Panama Canal has risen to a level many times what it was a year ago. And this may worsen. Last year, the canal could handle between 30 and 40 ships per day. That has dropped to about 20. An ongoing drought will bring that number down further.
Climate change is ruining the canal’s usefulness, and the weather trends are against it. Lack of rain has brought down the amount of water in the Canal, which makes moving ships more difficult. Gatun Lake supplies much of the water for the Canal’s locks. Its water level has dropped considerably because of drought. Some meteorologists believe that El Nino will make that worse next year. Meteorologists think this trend may not reverse itself for years. The water table could worsen and completely cut off access for large ships.
It has been well over a century since ships regularly used the Cape of Good Hope and the Suez Canal as routes to the West Coast and Asia. The ability to use the Panama Canal would go on forever, with minor modifications and upgrades to its infrastructure over time.
A century ago, no one would have imagined that heat, drought, floods, or storms would threaten vast parts of the world. No one would have thought that global warming would pose an existential threat to part of the world’s population. The Panama Canal is in trouble, and it won’t go away.
