Faced with the persistent drop in water levels in the Panama Canal, operators of this maritime trade hub are considering a workaround. On Wednesday, Panamanian authorities announced a new “Multimodal Dry Canal” project that will begin transporting international goods through a “special customs jurisdiction” near the 110-year-old waterway.
The Panama Canal in difficulty
The Panama Canal, which connects the Atlantic and Pacific trade routes, has been in poor shape for some time. To operate, ocean vessels pass through a series of “locks” filled with fresh water from Lakes Gatún and Alajuela. Older Panamax locks require about 50 million gallons of fresh water per vessel, while a small number of “Neo-Panamax” locks built in 2016 require only about 30 million.
But canal improvements can't keep pace with the cascading effects of climate change. Lakes Gatún and Alajuela are fed by rainwater, and a persistent drought worsened by El Niño has resulted in the second driest year in the Panama Canal's existence.
Insufficient emergency measures
To compensate, the daily average number of ships allowed to pass through the lock system has been reduced from 38 to 27, while each ship must now carry less cargo. Operators hope to soon return that average to pre-drought levels, but likely at the expense of the health of local marine ecosystems and drinking water supplies.
Meanwhile, as AFP reports, maritime traffic jams regularly see more than 100 ships waiting to pass through the 50-mile passage.
The “Multimodal Dry Canal”, a complementary solution
The new Multimodal Dry Canal project announced this week will attempt to further ease a global trade problem that particularly affects the Panama Canal's most frequent users – the United States, China, Japan and South Korea.
In a presentation of plans for the project this week, Panamanian officials said no additional investment or construction was needed. Instead, this land route will function as a complement to the canal using “existing roads, railways, port facilities, airports and free trade zones”, according to AFP.
A potential additional cost for consumers
Speaking to the BBC earlier this month (before the dry canal was revealed), a shipping company chief executive said these land diversion routes could be costly – expenses that are “usually passed on to the consumer “.
Despite these reservations, this innovative project could provide a welcome respite for ship crews facing growing congestion in the Panama Canal. A creative solution to the climate emergency that threatens this vital artery of global trade.
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