The Panama Canal is dry. The reason for this is climate change and the resulting drought. The risks to the world economy are huge: In fact, 3 percent of global trade in goods passes through the Panama Canal; However, this rate rises to 8 percent in grain trade and 5 percent in chemical products and petroleum derivatives trade. However, the current situation has brought about a serious change.
As a result of the forced reduction in crossings that have already begun, the number of ships that can pass through each day will gradually decrease. From the current 31 boats per day, it will drop to 25 in November and reach just 18 from February 2024, about half the ships passing through the canal under normal conditions. There are currently queues with more than a thousand cargo ships. That’s why shipping companies are ready to compete and pay millions to get priority on waiting lists. Suffice it to say that the Japanese group Eneos paid almost four million dollars to surpass its competitors and win transit in a short time.
However, there are also those who take action. Due to the timely announcement of new restrictions, companies had the opportunity to rearrange routes. But the restructuring will have a significant economic impact for the companies involved, as well as American consumers, if restrictions continue beyond February.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.