Panama's Drought Pushing Shipping To The Suez Canal, Driving Costs Higher
Less than four years after the Panama Canal’s expansion ushered in the “big ship” era for the Port of Charleston and other East Coast ports, the Central American waterway is falling victim to climate change — and the competing Suez Canal will likely benefit from the problem.
The Panama Canal Authority said this month that droughts have led to an alarming drop in water level at Gatun Lake, one of two lakes that feed the canal’s locks. Every time a ship passes through the canal, about 50 million gallons of lake water has to be dumped into the locks. That water is then discharged into the ocean.
If Gatun Lake water level falls below 84 feet, it won’t be able to to fill the locks, according to RTI International, a nonprofit that monitors the lake. The water level stood at 84.37 feet earlier this month, less than the 88 feet expected for this time of year. The canal’s watershed received 20 percent less rainfall in 2019 than historical averages, the authority said. At the same time, higher temperatures have led to a 10 percent increase in water evaporation levels.
So, beginning Feb. 15, the authority will add a $10,000 surcharge to the fees ships pay when they transit the canal, which now handles about 6 percent of all world trade. A second, variable fee ranging from 1 percent to 10 percent of a ship’s regular toll will also be charged, with the amount dependent on Gatun Lake’s level at the time of transit. The biggest container ships traveling through the canal — like those now calling on the Port of Charleston — can pay a toll of roughly $1 million, so the extra fees can add up fast.
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https://www.postandcourier.com/business/climate-change-could-impact-routing-of-cargo-headed-to-port/article_bf9d4396-3c87-11ea-8c1a-2336fe08f297.html