It is likely not a surprise the Panama Canal needs water to operate. It might be more surprising though that the canal, which connects the Pacific Ocean to the Caribbean Sea, is thirsty.
The Panama Canal, and Central America more broadly, is experiencing one of the worst droughts in its recorded history. With less water, the canal is forced to place restrictions on the amount of cargo ships can carry, meaning carriers have to limit the shippers they can serve on routes that rely on this waterway.
Carlos Vargas, the Panama Canal Authority's vice president of water and environment, said earlier this year January was the driest month the country experienced in the last 106 years. Precipitation in the Panama Canal watershed was about 90% below the historical average this year, a spokesperson for the Panama Canal Authority told Supply Chain Dive.