Panama Canal is among the busiest trade routes in the world.
The Panama Canal, connecting the Pacific and Atlantic Oceans, is one of the busiest shipping lanes in the world. But due to the impact of climate change, the water levels are shrinking, leading to a traffic jam near it. According to a viral post on X (formerly Twitter) by a former private investigator, more than 200 ships are stuck on the either side of Panama Canal. Some of these ships have been trapped for more than three weeks, WayneTech SPFX said in the post on the social media platform.
"The ships are allegedly stuck due to an unprecedented drought taking hold in Panama right now. The canal relies on rainwater to replenish its sources, but a lack of rain makes it difficult for boats to cross," the post said.
It added that the Panama Canal Authority has placed a higher premium on the heaviest and largest ships, which could lead to supply disruption and higher prices.
Bloomberg also confirmed the delay saying local authorities have put some restrictions leading to further delays.
"There is very little slack, if anything at all, in terms of transiting more ships than right now," Bloomberg quoted Peter Sand, chief analyst at Xeneta, which analyzes ocean and air freight markets, as saying.
Reduced water level also means that the ships have to take less cargo.
Lake Gatun, one of the water bodies that supply the canal with water, has seen its depth falling to a seven-year low, said the Bloomberg report. The level is forecast to remain below five-year average levels through until the end of October, even as Panama's rainy season arrives.
Suppliers are forced to seek alternative routes, using trains to transport goods offloaded by cargo ships on the US West Coast.
Panama Canal is a vital trade route, accounting for 40 per cent of all US container traffic. If the situation doesn't improve soon, the impact could reach far beyond North America.