Panama Is Not In The Headlines

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Panama is not in the headlines, but maybe it should be. Today we’re talking about water levels in the Panama Canal.

When most people hear that the canal is experiencing low water, they assume the immediate result will be fewer ships passing through each day.

That is not yet the principal restriction.

The more immediate constraint is draft.

Draft is the distance between the waterline and the bottom of the ship. The heavier the cargo, the deeper the vessel sits in the water.

When water levels fall, the canal cannot safely accommodate ships that sit as deeply in the water. The canal may still allow the same number of vessels to transit, but each vessel may have to carry less cargo.

That means the number of ships can remain unchanged while the actual transportation capacity of the canal declines.

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