Restrictive Measures at Panama Canal Could Impact Year-End Consumption and Consumer Prices, Including Black Friday
(CNN Spanish) – The Panama Canal has implemented restrictive measures that could potentially affect consumption in the region and even impact consumer prices, including the popular shopping day Black Friday.
Due to a prolonged drought and the El Niño phenomenon, the Panama Canal Authority has reduced the draft from 15 meters to 13 meters. This reduction means that there is less cargo on ships, leading to a decrease in the number of ships from 36 to 32 that can transit the interoceanic route daily.
Experts in the shipping industry believe that many of these ships are carrying containers filled with merchandise destined for the United States, specifically for the year-end holidays, which need to arrive on time.
Jorge Luis Quijano, the former administrator of the Panama Canal, explained to CNN that cargo that does not arrive in time for Black Friday will face significant difficulties in being sold. This concern stems from the restrictions leading to longer lines than usual and reduced container transfers.
Quijano also stated that shipping companies are incurring additional costs by opting to move cargo through the dry canal or rail from the Atlantic to the Pacific and vice versa. Although this is an option, it is more expensive. These costs, which allegedly amount to around $750 per container for a shipping company, will likely be transferred to the consumer.
Shipping consultant Carlos González De La Lastra further confirmed that the high season for shipping is in August, as supply chains need to maintain warehouses for the final consumer, especially during the Christmas season. He noted that there will likely be an impact on individual container costs, which will result in increased product prices.
In response to the concerns raised, Boris Moreno, the Vice President of Operations of the Panama Canal Authority, reassured users that they are doing their best to minimize the impact. He clarified that the reservation system allows ships to pass through on their reserved day, and the ships in line are those that did not make a reservation.
The Panama Canal Authority is actively seeking ways to address the water scarcity challenge and ensure operations in the future, especially in anticipation of a stronger dry season next year.
These measures are aimed at conserving water resources and maintaining the functionality of the Panama Canal. However, the impact on consumers and the potential rise in prices remain significant concerns.