Maersk to bypass Panama Canal amid drought

Jan 11 (Reuters) – A.P. Moller-Maersk .CO will use rail transport to avoid the drought-hit Panama Canal, the Danish shipping giant said late on Wednesday, as low water levels have caused one of the world’s main maritime trade routes to reduce crossings.

The Panama Canal Authority (ACP) has reduced the amount and weight of vessels passing through based on current and projected water levels in Gatun Lake, the rainfall-fed principal reservoir that floats ships through the Panama Canal’s lock system, Maersk said.

“The vessels that utilised the Panama Canal before will now omit the Panama Canal and use a “land bridge” that utilises rail to transport cargo across the 80 km (49.71 miles) of Panama to the other side,” the firm said in an advisory to its customers.

Panama’s drought has decreased transit slots at the canal, already forcing fuel tankers and grain shippers to take longer routes to avoid congestion.

This is adding further disruption to the global shipping network as companies like Maersk and Hapag Lloyd are switching away from the Red Sea after Iranian-backed Houthi militants in Yemen stepped up attacks on vessels in the Gulf region.