The Panama Canal Authority has forecasted a decline in cargo volume for the 2023 fiscal year due to a combination of geopolitical tensions and changes in shipping routes.
First reported by Reuters, the institution expects only 500 million tonnes of goods to pass through the waterway, which is 10.3 million tonnes less than the previous forecast.
The decrease in volume is due in part to the war in Ukraine, concerns about a global recession, and reduced commercial activity in China.
Ricaurte Vasquez, the canal’s Administrator, noted that the canal is losing traffic from ships that once carried fuel and gas from the United States to Asia but now go to Europe and bypass the canal.
As a result, the canal is losing approximately two daily transits of liquefied natural gas vessels. Vasquez added that the canal has partially compensated for this loss by charging higher prices.
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Nicolas Vukelja, former President of Panama’s Maritime Chamber, commented on the situation, stating that the cargo decrease of approximately 4 per cent compared to the entity’s best years is “worrying” for the canal’s income.
The Panama Canal is a crucial transit point for global trade, and its declining cargo volume is a cause for concern, especially for Panama’s economy.