Christmas deliveries thrown into chaos as trade route 5,000 miles away struck by drought

The British Government has been urged to establish a diverse supply chain for the UK as Christmas is being threatened by the record-breaking drought affecting the Panama Canal. The Central American trade route is one of the world’s most important, as it is normally crossed every month by some 1,000 ships carrying more than 40 million tonnes of goods – or five percent of the global maritime trade volumes. However, for months now the Panama Canal Authority (ACP) has been forced to reduce the number of ships crossing the canal each day as well as the weight of their cargo to save the water available to operate the locks. As a result, ships are stuck on the route and the delivery of goods is being hugely delayed – just as Christmas is approaching. Marco Forgione, Director General at the Institute of Export & International Trade, explained the ripple effect the drought in Panama, more than 5,000 miles away, has on the UK. He said: “Delays like this ripple across the whole supply chain – which is concerning for both businesses and consumers during the busiest retail period of the year. If vessels miss scheduled port stops due to delays, products will need to take longer alternative routes to reach their final destinations. “This could lead to gaps on shop shelves, impacting everything from Christmas stockings to the traditional festive lunch, leaving families short of essential items.” The commercial impact on businesses, he added, can be massive if during these delays fresh produce is spoiled or delivery deadlines are missed. The drought, Mr Forgione continued, “highlights the vulnerabilities in our UK supply chains and the need for solid strategies to be in place in order to minimise the impact of future disruptions”. The expert believes Rishi Sunak’s Government needs “to introduce a formal import strategy, linked to the export strategy”. He added: “This strategy must establish a diverse supply chain for the UK – ensuring that we are not reliant on one route for our imported goods which will help to mitigate the impact of delays such as those we are currently seeing in the Panama Canal.” The drought experienced in Panama has, over the past months, hugely lowered the water level of lakes Gatun and Alajuela feeding the canal’s locks. More than 50 million gallons of water are needed for each ship to cross. While the ACP normally allows up to 40 ships through the canal each day, it cut the number of daily crossings throughout the year as the drought continued to grip Panama. Last month, it set new limits, which are currently seeing fewer than 30 ships crossing each day. While the busy trade route always sees ships queuing up on either end of the canal, the average time waiting time has risen to 11.7 days this month from 4.3 days on November 7, according to the ACP.