Huge backlog of 200 ships are stuck trying to enter the Panama Canal as they wait WEEKS amid slowed traffic due to drought: Delays set to wipe $200M off profits and cause spike in US grocery and parcel prices
The large vessels, thought to be carrying millions of dollars worth of goods, are locked in a traffic jam with some waiting for weeks to cross the Panama Canal
Vessel-tracking data shows hundreds of ships, mainly bulk cargo or gas carriers, waiting near entrances on the Pacific and Atlantic oceans
The number of daily transits through the canal has been capped at 32 by water authorities in a bid to conserve water.
More than 200 ships are stuck on both sides of the Panama Canal after authorities capped the number of crossings because of a serious drought.
The large vessels, thought to be carrying millions of dollars worth of goods, are locked in a traffic jam with some waiting for weeks to cross.
Vessel-tracking data highlights the extent of the issue with hundreds of ships, mainly bulk cargo or gas carriers, seen waiting near entrances to the canal on the Pacific and Atlantic oceans.
The number of daily transits through the canal has been capped at 32 by water authorities in a bid to conserve water.
Panama is set to lose $200million in revenue from the delays and it could cause a spike in US grocery and parcel prices as extra fees are hiked on to shipping costs.
The entrances on both sides of the Panama Canal are jammed with some ships backed up for more than 20 days.
Some shipowners have resorted to rerouting their journeys to avoid the backlog.
The canal uses three times as much water as New York City on a daily basis and needs rainfall to replace it.
But the rainy season is yet to arrive in Panama and the canal is going through its driest spell in more than a century.
Restrictions for the number of vessels passing through has been extended until September 2.
‘The delays are changing by the day. Once you make a decision to go there is no point to return or deviate, so you can get stuck,’ Tim Hansen, chief commercial officer at Dorian LPG, which operates large gas carriers, told the Wall Street Journal.
Without enough rain, the ship transits are cut and the lucky ones that cross pay hefty premiums.
This increases transport costs for cargo owners like American oil as well as Asian importers and gas exporters.