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The drought continues! Panamanian government launches "multimodal trunk canal" plan

Published: 2026-08-25 Author:

Last Updated: 2026/08/25, Earlier, the El Niño phenomenon caused global climate anomalies, which deeply affected many countries, including Panama. The most severely affected is the Panama Canal, which is currently suffering from a drought crisis that has hindered maritime trade. To this end, the government has launched a multi-channel intermodal transport plan. It is understood that the Panama Canal connects the Pacific Ocean

Earlier, El Ni ñ o caused global climate anomalies, which affected many countries, including Panama. The worst affected is the Panama Canal, which is currently suffering from a drought crisis that has hampered maritime trade. To this end, the government has launched a multi-channel intermodal transport plan.

It is understood that the Panama Canal, which connects the Pacific Ocean and the Atlantic Ocean, is an important shipping route, known as one of the world's seven engineering wonders of the "world bridge", but also one of the world's important trade waterways.

The Panama Canal is a sluice canal, 26 meters above sea level. Ships use sluices to raise or lower the water level, and 200 million liters of fresh water need to be discharged into the ocean each time. The fresh water mainly comes from nearby Lake Gatton and Lake Alajuela, and the water source of these two artificial lakes mainly depends on precipitation, but due to the influence of climate change and El Ni ñ o, the local rainfall is seriously reduced, and it is difficult to alleviate the problem of drought even in the rainy season.

It is said that the Panama Canal handles about 3% of the world's maritime trade and 46% of containers from Northeast Asia to the east coast of the United States. Under normal circumstances, there are 39 ships passing through every day, but when seriously affected, there are only 24 vessels per day. Recently recovered to 27 ships.

But the decline in the capacity of the Panama Canal has hurt agricultural trade between the northern and southern hemispheres, especially coffee, bananas and other agricultural products exported from Central America, while the United States is the world's largest consumer of coffee.

In addition, due to the limited capacity, there are queues of more than 100 vessels from time to time, resulting in maritime traffic jams, and some vessels have no choice but to make a detour, but this will greatly increase the transportation time and cost, so there is a priority qualification ton auction, which pays as much as US $4 million, which eventually leads to rising prices and inflation, which is also one of the reasons for the recent rise in coffee prices.

Earlier, the Panama Canal Authority (ACP) had invested $32 million to launch a 15-year plan. The plan allows farmers to expand the planting of Robusta coffee trees near the canal, through reforestation of coffee trees, to slow down years of accumulated environmental damage, including soil erosion and local river pollution, and to slow the decline of the canal water level. but the process is slow and does not immediately solve the current dilemma.

As a result, recently, the head of the logistics department of the Panamanian presidential palace said that a new project, called "Intermodal Trunk Canal", would be launched to ease the pressure on the canal. The "dry Canal" plan, positioned as a complement to the Panama Canal, will use existing roads, railways, port facilities, airports and duty-free zones to implement new "special customs jurisdiction" and, as a result of the use of existing infrastructure, therefore, no investment is required for the new project.

Moreover, the customs of the Panamanian authorities believe that the plan will help to shorten the time for transhipment and customs clearance, improve the traceability of goods and promote the digitization of customs processes, thereby enhancing the transparency of the transport of goods and preventing corruption and organized crime. Moreover, the plan can maintain the competitiveness of waterway transport, and the "dry Canal" plan is a lower-cost alternative to the options offered to shipping companies by other countries.

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