Panama Canal Authority (ACP) is predicting a drop in revenues of approximately $200 million in 2024 due to an ongoing drought in Panama. The drought has compelled the canal to reduce the allowable draft for transiting ships, thus limiting the number of daily transits. ACP Administrator Ricaurte “Catín” Vásquez acknowledged that this drought, exacerbated by the El Niño weather phenomenon, is part of a broader trend of reduced water availability. The canal is planning to accommodate 30 to 32 vessels per day in fiscal year 2024, down from the typical 36 to 38, mainly due to water constraints. Ships are now allowed a draft of 44 feet, instead of the usual 50 feet.

Vásquez mentioned an internal discussion within ACP about a potential project for a fourth set of locks. However, this idea faces obstacles related to water availability and cost. He stated that it’s a consideration but emphasized the high costs, nearly twice that of the current neo locks. ACP is exploring ways to secure new water sources and expand its hydrographic basin. Vásquez pointed out that a significant portion of upcoming ships exceed neo-Panamax requirements, which necessitates adaptation to prevent the canal from becoming obsolete.

Looking ahead, ACP aims to diversify its activities and explore new economic ventures beyond ship transit. The canal’s business model is evolving, with a shift towards viewing cargo, rather than ships, as the primary client. Investments in navigation technologies and personnel training, especially in fields like data analysis, will be essential for its future development. With approximately 1,800 to 2,000 workers set to retire in the next few years, the canal also faces a significant workforce transition. Expanding its role and influence within the global trade landscape is part of ACP’s long-term strategy to increase trade volume passing through Panama.