Photo: Courtesy of the Panama Canal Authority

Panama Canal ensures steady draft and transit reliability

  • Business & Finance

Panama Canal has secured a steady draft for the upcoming period ensuring an operational level of water and transit reliability in the second half of 2020, the canal authority said in the latest update.

The announcement is being made as the canal resorted to water-saving measures earlier this year after experiencing the fifth driest year at the canal in 70 years.

“This unprecedented drought severely constrained water levels at Gatun and Alhajuela Lakes, the main sources of water for the Canal and half of Panama’s population. Despite the extensive use of water conservation tactics across Canal operations, inadequate draft levels were still projected to significantly restrict cargo transiting the waterway if no further interventions were made,” the canal authority said.

“As a result, on February 15, the Panama Canal adopted a series of bold measures to sustain an operational level of water, including a freshwater surcharge informed by daily water level data at Gatun Lake, a profit-neutral measure that is also a standard practice across the industry.”

The canal also changed its reservation system to increase certainty around transit schedules, which allowed for more efficient use of water resources and conservation tactics, such as cross-filling lockages.

As informed, after the conservation measures were implemented, the water levels at Gatun Lake can accommodate a steady 45-foot draft, higher than projected for the start of the rainy season, which is expected to begin mid-May.

Transit reliability is critical for the canal authority especially having in mind the latest coronavirus-driven shifts in global trade as companies look at alternative routes to save money and cut costs.

The canal has also provided relief to its customers during this time of instability by introducing extended flexibility surrounding fees and swapping booking slots. 

Despite the draft reliability, the Panama Canal believes that it needs a long-term solution.

“By the end of the year, the team aims to not only request and review engineering proposals, and after that, begin constructing a long-term solution. Having a steady water supply is a top priority for the Canal, and so we will partner with innovative engineers to ensure that we can maintain our reliable service for years to come,” the authority concluded.

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