Panama Canal’s Severe Drought Leads To Disruptions In Christmas Supplies

The crucial 50-mile shipping channel that connects the Atlantic and Pacific seas, the Panama Canal, is experiencing severe drought conditions that are causing unusual delays in the passage of products. This has raised worries about possible disruptions to Christmas supplies in the United States.

Due to the canal’s lowest water levels since the middle of the 20th century, hundreds of container ships laden with goods such as Apple’s latest iPhones, televisions, fitness gear, apparel, and holiday decorations will have to wait longer than usual.

The problem in the canal is expected to impact the entire global supply system, possibly affecting Christmas celebrations in Europe and the UK.

The problem affects more than just holiday merchandise; it also affects necessities like food and energy sources, as the canal causes delays in the transit of gasoline and grains.

Some container ships have delays of up to four weeks, and experts estimate that this might continue for several months, with possible consequences extending until 2025.

Some businesses have claimed to have paid outrageous fees—up to $4 million, or £3 million—to accelerate goods and avoid the long lines to lessen the delays. Compared to just a year ago, the average auction price was roughly $173,000 (£137,000).

Some ships are turning to other routes due to the difficulties, such as passing through Egypt’s Suez Canal, which comes at extra expense and puts further pressure on the maritime sector.

Because of the ongoing drought, it is projected that the number of ships using the Panama Canal will decrease even more to just 18 per day starting in February.

There’s rising concern among Christmas buyers that their intended purchases could arrive after the holidays due to shipping delays.

Industry insiders caution that the delays in transit resulting from the backlog of canal ships may have a lasting impact on international trade and may raise prices in several industries, including food and energy.

Reference: Daily Mail

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Source: Maritime Shipping News