Port Officials continue to monitor developments in the Panama Canal

By Aabigayle McIntosh

Concerns are mounting over the prolonged drought conditions in the Panama Canal, the Russian invasion of Ukraine, and the ongoing situation between Israel and Hamas, as these factors may contribute to an increase in shipping costs.

This potential escalation poses a significant threat to importers, brokers, and consumers alike.

Darwin Telemaque, the Manager of the Antigua Port Authority, addressed the challenges faced by the Panama Canal due to low water levels, making it difficult for ships to navigate.

He highlighted that the repercussions extend beyond the canal itself, impacting the entire North and South American continent, along with the areas that rely on shipments from or to those regions.

Normally accommodating over 30 vessels per day, the Panama Canal plays a crucial role in generating substantial revenue. However, the current shortage of rainfall is posing a challenge to its usual operations.

“The water situation they were hoping would improve, has not it is becoming more and more challenging and gradually reducing the number of ships that go through daily. That leads to long delays for Cargo and very, very high cost,” Telemaque explained during a state media interview last night.

In addition, some ships have been compelled to take alternative routes, leading to considerable delays in cargo shipments. Although this is already influencing shipping costs, Telemaque noted that they have not yet observed the full extent of the numbers reflecting the impact of the COVID-19 pandemic in this regard.

“In many of these cases, there are delays and you would see some of these showing up as the situation worsens. There is no doubt, however, that increased transit time has its cost as well.

“Because if you were to be buying goods on a line of credit for six months and it shows up 80 days later, that would affect your cash flow,” he added.

He further warns that no matter how bad it gets it is not abating anytime soon.

“As a matter of fact, on March 20th, the Port Management Association of which I am the Chairman will be hosting a webinar with Panamanian authorities to get a feel of what it is like on the ground, how they intend to manage it, and what is the impact in North America because that is the first place, we are going to see it,” Telemaque said.

 Currently, there are no significant challenges reported with cargo departing from Florida.