An extreme drought in Panama is forcing authorities to substantially scale back shipping through the Panama Canal, one of the world’s key shipping channels. This comes at a time when traffic through the Suez Canal has been significantly disrupted. Ilya Espino de Marotta, the Panama Canal Authority’s deputy administrator, joins Stephanie Sy to discuss.
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AMNA NAWAZ: An extreme drought in Panama is forcing authorities to substantially scale back shipping through the Panama Canal, one of the world’s key shipping channels. And it comes at a time when traffic has also been disrupted through the Suez Canal, where commercial shipping has been limited by the widening Middle East conflict.
Stephanie Sy looks into the problems for the critical Panama Canal. STEPHANIE SY: The canal is one of the most important waterways in the Western Hemisphere and typically carries 5 percent of the world’s maritime trade and 40 percent of U.S. container traffic.
But with water levels below normal, authorities are only allowing 24 ships to cross a day, down from 38. That means more delays and higher shipping costs. The Panama Canal Authority’s deputy administrator, Ilya Espino de Marotta, joins me now for the Panama. Ms. Marotta, thank you so much for joining the “NewsHour.”
So describe the severity of the situation at the Panama Canal right now. You’re operating at a reduced capacity, 24 ships a day. Do you expect that volume to go even lower in coming days and months? ILYA ESPINO DE MAROTTA, Panama Canal Deputy Administrator: Hi. Good afternoon. Happy to be here.
No, actually, we are forecasting that we will stay up 24 until the end of April, beginning of May, when, hopefully, rainy season starts again. So we have to reduce the amount of traffic because we are just entering the dry season in Panama. So we
Will have no rain whatsoever. And we had a very dry season in ’23 because El Nino effect. Now, you saw that all over the world, not only Panama. So we were forced to reduce the number of transits and maintain a 44-foot draft for our clients not to be impacted too much. So
We have less loss where we’re trying to give a draft that is still very competitive for the industry. And hopefully we will stay at 24 until rainy season comes back in late April, early May. STEPHANIE SY: What if the rains don’t come back? You mentioned
The periodic weather pattern El Nino, but I have also seen quoted meteorologists that say climate change has exacerbated a drought there. Do you really see relief coming with the next rainy season? And what if that relief doesn’t come? ILYA ESPINO DE MAROTTA: Yes, no, we’re looking at NOAA predictions. And predictions do say
That El Nino is weakening and we’re going into the April/May/June quarter. We’re looking that — is, we’re going to neutral and maybe, at the end of the year, in other words, October, November, December, El Nina effect will come in, which means a lot of rain. So,
According to the meteorologist forecast of NOAA, that’s the perspective. So we don’t think that we will have a problem coming rainy season next year. ILYA ESPINO DE MAROTTA: If for any reason, the rain — some delay, then we might have to adjust either draft or reduce one or two more transits per day to maintain the lake until rainy season comes in, if it comes a little bit later in the — in that quarter.
STEPHANIE SY: I want to ask you about long-term planning. Gatun Lake, which I understand feeds the Panama Canal, there are also thirsty cities that draw water from that lake. And there is this ongoing drought. Are you in a place now where you are having to plan for perhaps an alternative reservoir to make
Sure that the canal can stay functional in years to come, not just this year? ILYA ESPINO DE MAROTTA: Yes, definitely. We are looking at a very holistic project that is not only an additional reservoir. And we do have two reservoirs. We have Alajuela Lake, which also provides potable water for the population,
And it’s a regulatory lake for the Gatun Lake. So we have two lakes currently. And we were able to fill Alajuela Lake to the maximum. So let’s say potable water is assured for the population, and that’s how we reduce transit. But we are looking
At two additional projects to have increased water-saving measures, and then we’re looking at a new reservoir that will be built on the western side of the Panama Canal watershed. We have analyzed the project. It will provide water for either 11 to 16 lockages per day,
And that’s a project that we hopefully will be embarking sometime in late ’24, early ’25. STEPHANIE SY: Ms. Marotta, tell me what your level of concern is. You make it seem like it’s a temporary problem for this year with the El Nino weather pattern,
And yet there’s long-term climate change concerns and drought concerns. How do you make sure that the Panama Canal continues to be sustainable? ILYA ESPINO DE MAROTTA: Well, we have experienced dry years before. 2016 was
A dry year. 2019 was a dry year. 2023 has been dry. So we can see that there’s a pattern change. This has impacted the entire world, not just Panama, the Rhine River, the Mississippi River, the Amazon River, Argentina. So, definitely, 2023 has been of a big impact. We follow NOAA.
We are definitely — we have — have been appointed a chief sustainability officer for the canal to impact not only the canal, but also worldwide policy to go into carbon neutrality, to be net zero carbon by 2050, but not just us, also the industry. So we are definitely putting in place policies to
Help towards a better environment and reduce the carbon footprint. STEPHANIE SY: Ilya Espino de Marotta with the Panama Canal Authority, appreciate you joining us. ILYA ESPINO DE MAROTTA: My pleasure.