The Panama Canal is the primary route for container ships from Asia to the eastern coast of the United StatesThe drought-related traffic jam in the Panama Canal has diverted about 20% of the volume of freight to the East Coast of the United States to the West Coast, according to shipping software company Setlog.
After evaluating the flow of goods from US customers in Setlog's supply chain management software OSCA, Setlog board member Ralf Duester says the diversions are mainly being made to the ports of Long Beach and Los Angeles.
“From there, the shipments are transported by rail or truck or, if there is flexibility, to other distribution warehouses,” Duester says.
“These are mainly consumer goods.”
The Panama Canal is the primary route for 57.5% of the total cargo transported in container ships from Asia to the eastern coast of the US, according to the Panama Canal Authority (ACP).
Because of low water levels the ACP has reduced the number of vessels that can transit the Panama Canal from 36 to 32 a day.
The authority says 135 vessels are queued to transit the 80 km long canal, higher than the goal of less than 90 vessels.
Media outlets report delays of up to three weeks.
The ACP has also imposed depth limit for large vessels, which means some ships offloaded containers onto trains and collected them on the other side of the passage, adding to transport costs.
Setlog’s Duester says the situation should be a wake-up call for policymakers and companies to prepare for climate change disrupting supply chains.
"Climate change has arrived in logistics,” he says. “The forecasts of climate researchers show that it is high time for politicians and companies to take precautions."