Panama Canal is running low on water, and it's rationing ships to cope: What that means for global shipping

The Panama Canal Authority announced on Thursday that it will cap daily transits starting early September in anticipation of a longer-than-usual El Niño season, which is expected to lower water levels. This comes after the authority had previously pledged not to limit vessel passage. Starting September 4, the canal will restrict daily transits to 34 vessels and reduce it to 32 vessels from September 15.

The canal had an average of 35 daily transits through June 2026, but its capacity can handle up to 40 crossings per day. Canal authorities had told Reuters earlier that restrictions were not in the plan for the year. As of September 4, the Neopanamax locks will have nine slots, while the older Panamax locks will have 25 slots. By September 15, the Panamax locks will be limited to 23 slots.

Rainfall from May through August was 34% below the historical average, and watershed inflows fell 44% below normal. The canal authority warned that the anticipated severity of the 2026-2027 El Niño could further reduce precipitation, threatening the waterway's long-term sustainability and local water supplies. The authority has also postponed planned reductions in maximum authorized drafts, with adjustments delayed until September 2 and then again until October 1.

Draft refers to the depth of water a ship needs to float safely; a lower draft limit means vessels may need to carry less cargo to pass through the canal. Canal administrator Ricaurte Vasquez said El Niño this year could persist much longer than before, necessitating the canal's transit capacity limits, similar to measures taken during droughts in 2023 and 2024.

The 2023-2024 experience has prepared the canal for both known and unknown challenges, according to Vasquez.