The Panama Canal Is Drying Up and it’s a Huge Problem for the U.S.

By: Lauren | Last updated: Nov 22, 2023

The Panama Canal connects the Pacific and Atlantic Oceans and is used by almost 40% of all cargo ships. However, this very important channel is in trouble as the freshwater sources used to fill it are slowly disintegrating due to a two-decade-long drought.

As fewer cargo ships can make their way through the Panama Canal, the US and the world as a whole will suffer immensely.

Understanding the Importance of the Panama Canal

It’s first crucial to consider how the Panama Canal functions before grasping the real trouble it’s in.


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Running from one side of Panama to the other, the canal is a man-made channel that connects the Atlantic and Pacific Oceans. When it was built in the early 1900s, it completely changed global trade, cutting many routes down by thousands of miles.


Nearly Half of All Cargo Ships Use the Panama Canal

Because it is such an efficient way to get around the world, 40% of all cargo ships use the Panama Canal to bring various products from one side of the planet to the other.


Source: John van Hasselt/Sygma/Getty Images

Essentially, that means that more than 15,000 ships pass through it every year, an average of 41 cargo ships a day. It’s an incredible operation and absolutely necessary to global trade.

How the Canal Works for Trade

The Panama Canal is not just a river that runs between North and South America—it was made specifically as a channel for large cargo ships in the early 1900s.


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The canal uses a system of compartments with entrance and exit gates—these compartments raise the ships with water from sea level up to the level of Gatun Lake, where they move across until being lowered once again to exit at sea level.

Historic Drought Is Causing Significant Problems

But in order to complete this transportation of the ships, Panama needs to ensure that there is enough water in the compartments. And an almost unbelievable 50 million gallons of water is needed for every ship that passes through.


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That means they need to pump millions of gallons of water into it continuously from Gatun Lake. However, because of the 20-year record-breaking drought that Panama is experiencing, Gatun Lake has very little water to be used in the canal.

Cargo Ships Wait in Line for Days to Pass Through

Just last month, Panama authorities reported that ships were waiting up to a week and a half to pass through the canal, and at one point, there were more than 160 cargo ships in line.

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Although more freshwater was pumped in, and today, that number is slightly lower, the problem will persist if Gatun Lake doesn’t start filling back up soon—and it could even get a whole lot worse.


How Does the Panama Canal’s Efficiency Affect the US?

Around 80% of the world’s goods are transported by ships, and the US in particular uses these ships to export and import over $1.4 trillion worth of products every year.

Source: Tom Stoddart/Getty Images

If these ships cannot efficiently make their way through the Panama Canal, it will cause an incredible disruption in the country’s economy, affecting the government and businesses, as well as citizens.


Global Inflation Is a Real Possibility

One of the major problems that will arise if the Panama Canal doesn’t get enough fresh water to function properly is that the prices of products around the world will increase.

Source: Eric Lafforgue/Art in All of Us/Getty Images

In just the last few years, inflation has increased globally due to supply chain problems caused by the COVID-19 pandemic, and the exact same thing could happen in the near future if this problem isn’t solved.


Can the Panama Canal Problem Be Fixed?

Of course, Panamanian authorities are doing everything they can to ensure the channel has enough fresh water to continue to send the cargo ships across.

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However, many argue that the issue will not be completely resolved until, as a global community, we address the real causes of climate change.


Panama Residents Will Need to Fight for Drinking Water

While the negative effects of the lack of water for the canal are important, it’s also essential to understand that by using all of the country’s freshwater for transporting cargo ships, there may not be enough drinking water for its residents.

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Panama Canal Authority official Ricaurte Vásquez Morales explained the problem clearly when he stated that the drought is causing “a slight competition between transit and human consumption.”


The Issue Might Get Worse Before it Gets Better

If nothing changes in the near future, the problem with the Panama Canal may get a lot worse.

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Already fewer and fewer ships are passing through every day, and Panama itself is losing millions of dollars due to the lack of transportation. But if the drought doesn’t end soon, many cargo ships may need to be rerouted, which will affect products, prices, and profits all around the world.


Real Change Needs to Happen, and Soon

Environmentalists and climate change activities have been begging for real and lasting change for years.

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And with recent reports stating the planet is experiencing its hottest years on record, it seems that without change, a lack of fresh water may become a real problem not just for the Panama Canal, but for every person on Earth.