The Panama Canal, a crucial trade route responsible for moving $270 billion worth of cargo annually and utilized by 40% of all US container traffic, is facing a severe drought. The water levels in the canal are so low that the Panama Canal Authority has imposed restrictions on the number of ships allowed to pass through each day, leading to long lines and delays. This has prompted shippers to pay extra to jump the line or seek alternative routes. The situation is exacerbated by climate change and infrastructure limitations.
Bloomberg reporter Peter Millard traveled to Panama to investigate the impact of the drought on global shipping and local communities. Millard discusses potential solutions for the water level issues, including experimental ideas and the controversial option of building a new reservoir that would flood nearby lands. However, finding a lasting solution is proving to be challenging. With the magnitude of the traffic jam caused by the drought, it is becoming increasingly urgent to address the issue and get the canal flowing smoothly once again. This crisis is not only disrupting global trade and supply chains but also affecting the lives of people in the region.