Each vessel that passes through the Panama Canal uses up to 120 million gallons of water to travel from one side to the other—120 million gallons from nearby freshwater reservoirs and rivers that end up in the ocean, unable to be reused. This figure has become a significant cause for concern as the effects of a years-long drought in Panama are mounting, now causing shipping challenges for those who depend on the canal.
Unfortunately, it’s a type of supply chain disruption we can only expect to see more of in the future. Climate and weather events are causing more disruptions than ever before, and companies are realizing the need to prepare their supply chains for the unexpected, leveraging container tracking for increased agility.
What Exactly is the Challenge at the Panama Canal?
The Panama Canal is roughly 50 miles long, from the Atlantic Ocean to the Pacific Ocean, with Gatún Lake between them. It’s fed by freshwater from Gatún, Alajuela, and Miraflores lakes, but over the past 20 years, Panama has seen an alarming decline in precipitation. Gatún Lake, once 89 feet above sea level, has declined to about 79 feet above sea level. A canal water shortage may seem impossible to have so close to the ocean, but the canal relies solely on water from rivers and reservoirs, and water from the oceans cannot be pumped into the canal system.
As a result of the drought and declining availability of fresh water, the Panama Canal Authority has decreased the maximum permissible draft—the distance from the waterline to the bottom of the hull—by 6 feet, from 50 feet to 44. In terms of a ship’s capacity, each foot of draft restriction equates to about 300-350 containers that it cannot transport. This has caused container shipping rates to increase due to the limited capacity and increased tolls to use the canal. There are now also restrictions on the number of ships passing through each day, resulting in longer wait times and bottlenecks.
The Panama Canal Authority is exploring other ways to help the problem, for example, ships offloading some containers before entering the canal and those containers being transported by rail and returned to the ship on the other side of the canal. There is also a $2 billion plan to reroute four rivers to flow into the waterway, which would mean the construction of new dams and tunnels. This is not a quick fix, but it might be the best option in the long term. In the meantime, companies must seek other ways to protect their supply chains from delays.
Facing Climate Disasters, Smart Shippers Turn to Ocean Container Tracking
The drought currently impacting the Panama Canal is a stark reminder of the unpredictable nature of global events and their potential to cause disruptions in supply chains, making it all the more important for companies to be prepared. One way they can accomplish this is through ocean container tracking.
Traditional container tracking methods rely on carrier data, which can be delayed and often lacks accurate detail. However, companies can receive real-time updates on their shipments’ precise location and status by using a partner like Vizion to gather data from various sources like terrestrial and satellite AIS plus port and terminal geo-fences. This allows for better decision-making, contingency planning, optimization, and agility.
Real-Time Visibility for Responsive Decision-Making
In the event of a disruption or slowdown, companies can get notified sooner with container tracking technology. They can then assess the situation and reroute their shipments, shift their production schedules, or make other adjustments to help their supply chain run smoothly and efficiently. These informed decisions, facilitated by real-time tracking, can significantly mitigate the impact of unplanned events.
Risk Assessment and Contingency Planning
Beyond responding to disruptions as they occur, companies can also improve their planning to protect themselves in case of a future disruption. With a granular level of visibility, they can understand their shipments’ journey and areas of risk. For example, if a particular trade route has the risk of being affected by recurrent weather patterns, alternative routes or modes can be planned in advance, saving time and resources the next time this challenge arises.
Data-Driven Insights for Optimization and Agility
Diving deeper into the data offered by visibility, companies can apply analytics toward optimizing their supply chain during predictable times so that when the unexpected arises, the supply chain is already in a healthy position to adapt. Informed by real-time data, they can achieve greater agility for continuous improvements to keep costs down and avoid shipment delays.
Discover Complete Ocean Freight Visibility by Vizion
With increased container visibility, companies can stay ahead of potential disruptions and minimize the impact of climate disasters on their supply chains. Vizion gives shippers and BCOs eyes and ears on the flow of vessels across the globe, along with detailed, real-time tracking events on each shipment. As data is delivered via API to their existing systems and with the support of powerful data analytics, it is now easier than ever for companies to reach a position of optimization and agility for their ocean shipments.
To learn more about Vizion, contact us today to schedule a demo.