‘This is going to get worse before it gets better’: Panama Canal pileup due to drought reaches 154 vessels
A ship navigates through the Panama Canal in the area near the Americas’ Bridge in Panama City on April 24, 2023. The scarcity of rainfall due has forced the Panama Canal to reduce the draft of ships passing through the interoceanic waterway, in the midst of a water supply crisis that threatens the future of this maritime route.
Luis Acosta | Afp | Getty Images
The number of vessels waiting to cross the Panama Canal has reached 154, and slots for carriers to book passage are being reduced in an effort to manage congestion caused by ongoing drought conditions that have roiled the major shipping gateway since the spring. The current wait time to cross the canal is now around 21 days.
The Panama Canal is a critical trade link for U.S. shippers heading to Gulf and East Coast ports. The U.S. is the largest user of the Panama Canal, with total U.S. commodity export and import containers representing about 73% of Panama Canal traffic. Forty percent of all U.S. container traffic travels through the canal every year, about $270 billion in cargo.
The massive pileup is a result of water conservation measures the Panama Canal Authority deployed in late July due to drought. The PCA has temporarily lowered the availability of booking slots from August 8-August 21 for Panamax vessels, which are the largest vessels that can cross the canal. These vessels can carry 4,500 twenty-foot equivalent units (TEUs). The number of pre-booking slots was reduced to 14 daily from 23.
Satellite photos from Planet Labs detail the congestion.
Vessels waiting to cross Panama Canal from Pacific Ocean side. Red square indicates Panama Canal
‘Planet Labs PBC’
Additional lower water level restrictions imposed by the PCA in July also require vessels to be 40% lighter, impacting vessels that were in transit when the requirements were implemented. The Ever Max was forced to unload 1,400 containers at the Port of Balboa in order to meet the requirements and gain passage. The vessel is currently anchored at the Port of Savannah.
“Those containers left may need another vessel to complete the journey,” said Captain Adil Ashiq, head of North America for MarineTraffic. “This is going to get worse before it gets better,” he said.
A canal lock loses 50 million gallons of water when a single vessel traverses the canal. Water levels in Gatun Lake, which feeds the canal, are at a four-year low.
Ricaurte Vásquez Morales, administrator of the Panama Canal, said that considering the changing circumstances, the canal is maintaining an open line of communication to keep customers informed about booking slot availability. “Through regular updates, transparent dialogue, and close collaboration with shipping lines and stakeholders, we strive to manage expectations and provide real-time information that enables our customers to make informed decisions,” he said.
Ashiq explained that vessels have to wait longer to transit the canal or ocean carriers make a business decision to take alternative routes, which add time and fuel costs to the journey. Shippers using multiple vessels to move their freight adds to freight costs, and longer lead times to secure bookings. Ultimately, he said, these costs may end up being passed down to businesses and consumers.
Recent data released by supply chain intelligence firm Descartes shows the East Coast ports continue to be the preference for U.S. shippers. West Coast ports saw a decrease of 38.3% in July trade, and top East and Gulf Coast ports processed an increase of 46.4%.
“Now is not the time to further stress supply chains that are still straining under ongoing logistical pressures,” said Stephen Lamar, president and CEO of the American Apparel & Footwear Association. He said surcharges and vessel restrictions will likely mean higher clothing and shoe prices for U.S. consumers this holiday season.
This latest reduction in bookings is on the heels of the PCA reducing the number of vessels allowed to go through the canal in a day. Starting on July 30, 2023, the daily transit capacity of the Panama Canal was adjusted to an average of 32 vessels per day (10 vessels in the newer Neopanamax locks, which serve the larger vessels, and 22 vessels in the older Panamax locks). Before the water conservation measures, transits were 34 to 36 a day.
Alan Baer, CEO of logistics company OL USA, told CNBC that shippers may have to start looking at other routes.
“With the increasing difficulty of reaching the U.S. East Coast via the Panama Canal, importers may be looking at vessels transiting the Suez,” Baer said. He added that this can be an effective solution for freight originating in the ASEAN region and some Southern China origins. However, for Northern China and North Asia, deviation via the Suez can add seven to 14 days of additional transit time.
Energy sector diversions are already happening
Diversions are already happening in the energy sector. The mounting delays have clean tankers, which carry refined petroleum products, avoiding the canal, shifting their preference to book routes to the Atlantic Basin, according to S&P Global. Data from its Commodities at Sea unit shows that in the combined June to July period, U.S. Gulf Coast clean petroleum product exports using the canal and traveling to the West Coast of South America slowed by 82% year over year. Exports in July, specifically, were down 12% year over year.
Cheniere Energy announced in July that it would avoid the Panama Canal to ship LNG because of the wait times. The canal is the quickest route for the LNG market to reach Asia. Coal traffic is also being impacted and making adjustments. India is a big importer of U.S. coal and vessels carrying the commodity also use the Panama Canal.
First Solar just cut the ribbon on a huge new factory in Iberia Parish, Louisiana, and it dwarfs the New Orleans Superdome. The company’s $1.1 billion, fully vertically integrated facility spans 2.4 million square feet, or about 11 times the size of the stadium’s main arena.
The factory began production quietly in July, a few months ahead of schedule, and employs more than 700 people. First Solar expects that number to hit 826 by the end of the year. Once it’s fully online, the site will add 3.5 GW of annual manufacturing capacity. That brings the company’s total US footprint to 14 GW in 2026 and 17.7 GW in 2027, when its newly announced South Carolina plant is anticipated to come online.
The Louisiana plant produces First Solar’s Series 7 modules using US-made materials — glass from Illinois and Ohio, and steel from Mississippi, which is fabricated into backrails in Louisiana.
The new factory leans heavily on AI, from computer vision that spots defects on the line to deep learning tools that help technicians make real‑time adjustments.
Louisiana Governor Jeff Landry says the investment is already a win for the region, bringing in “hundreds of good-paying jobs and new opportunities for Louisiana workers and businesses.” A new economic impact analysis from the University of Louisiana at Lafayette projects that the factory will boost Iberia Parish’s GDP by 4.4% in its first full year at capacity. The average manufacturing compensation package comes in at around $90,000, more than triple the parish’s per capita income.
First Solar CEO Mark Widmar framed the new facility as a major step for US clean energy manufacturing: “By competitively producing energy technology in America with American materials, while creating American jobs, we’re demonstrating that US reindustrialization isn’t just a thesis, it’s an operating reality.”
This site joins what’s already the largest solar manufacturing and R&D footprint in the Western Hemisphere: three factories in Ohio, one in Alabama, and R&D centers in Ohio and California. Just last week, First Solar announced a new production line in Gaffney, South Carolina, to onshore more Series 6 module work. By the end of 2026, the company expects to directly employ more than 5,500 people across the US.
Read more: First Solar pours $330M into a new South Carolina solar factory
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No, it’s not the new Bolt. GM’s design team previewed a new high-riding “sporty Chevrolet EV” that should be brought to life.
Is Chevy launching a new sporty EV?
This is the all-electric vehicle Chevy should sell in the US. General Motors’ design team released a series of sketches previewing a sporty new Chevy EV.
Although it kinda looks like the new 2027 Chevy Bolt EV as a higher-sitting compact crossover SUV, the design offers a fresh take on what it should have looked like.
The new Bolt is essentially a modernized version of the outgoing EUV model with a similar compact crossover silhouette. Nissan adopted a similar style with the new 2026 LEAF as buyers continue shifting from smaller sedans and hatchbacks to crossovers and SUVs.
Will we see the sporty Chevy EV in real life? It’s not likely. For one, the “exploration sketch” is by GM China Advanced designer Charles Huang.
GM Design posted the sketches on its global social media page, but the caption read “Sporty Chevrolet EV for the China Market.”
It’s too bad. The Bolt could use a sporty sibling like an SS variant. Chevy introduced the Blazer EV SS (check out our review) for the 2026 model year, its fastest “SS” model yet. Packing up to 615 horsepower and 650 lb-ft of torque, the Chevy Blazer SS can race from 0 to 60 mph in 3.4 seconds when using Wide Open Watts (WOW) mode.
Will the Bolt be next? I wouldn’t get my hopes up. And if GM does bring the sporty Chevy EV to life, it will likely only be sold in China. Like all the fun cars these days.
What do you think of the design? Would you buy one of these in the US? Let us know your thoughts in the comments.
While deliveries of the 2027 Bolt are set to begin in early 2026, Chevy is offering some sweet deals on its current EV lineup, including up to $4,000 off in Customer Cash and 0% APR financing for 60 months.
Ready to test drive one? You can use our links below to find Chevy Equinox, Blazer, and Silverado EVs at a dealership near you.
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Environment
Podcast: Electricity is the base currency, Tesla Robotaxi crashes, new Porsche Cayenne EV, and more
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss electricity becoming the base currency, Tesla Robotaxi crashes, the new Porsche Cayenne EV, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
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Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET:
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