Since the Panama Canal operates on a freshwater supply mostly held by Lake Alajuela and Lake Gatun, regional rainfall is fundamental to the planning of its operations. About 200 million liters of water are needed to supply the new lock system with enough water for each ship to pass through. A lack of rainfall reduces these water reserves. Due to an intense drought in 2019, fresh water supplies dropped to just 3 billion cubic meters, while 5.25 billion is needed to operate the canal. 2023 was the driest period on record since 1950, severely impacting the Canal’s operations. The Panama Canal Authority resorted to a series of water-saving measures to limit the drought’s impacts:
- Cross-fillings, cross-spilling, and short chamber lockages in the Panama locks.
- Maximize the use of tandem lockages.
- Increased use of water-saving basins in the Neopanamax locks.
- Minimized direction changes between northbound and southbound transits in Gatun locks.
- Suspension of hydroelectric power generation.
The lower rainfall than expected over a long period also forced the Canal to impose restrictions on draft and the number of ships that could transit daily. In 2023, the Panama Canal Authority reduced the allowed draft from the 50 feet standard to around 44 feet. This reduction has a significant capacity impact on New Panamax containerships. While a regular New Panamax containership can carry a load of around 12,500 TEU at a draft of 50 feet, reducing this draft to 44 feet results in a 40% capacity reduction at around 7,500 TEU. This seriously undermines the commercial viability of this ship class, forcing shipping lines to impose transit surcharges. Also, there is a growth in landbridge road and rail traffic has been observed between the Panamanian container ports on the Pacific and Caribbean coasts to compensate partially.
New water sources need to be found so the Panama Canal has enough water supply to grow its future capacity. The water shortage issue fuels a discussion on water use between different stakeholders in Panama (i.e., drinking water, water volumes for the Canal, and other uses).