The El Niño phenomenon has caused a drought problem in the Panama Canal, leading to a decrease in the number of ships passing through and a surge in logistics costs, with a direct impact expected on the US economy. The Panama Canal is crucial for US logistics, with approximately 70% of the total cargo volume passing through it originating from or destined for the United States. As the canal's water level has dropped due to El Niño, the number of ships passing through daily has decreased, and the amount of cargo loaded per ship has also declined. Consequently, ships are paying auction fees of up to $4 million to secure priority passage rights or opting for longer routes that bypass the Cape of Good Hope in Africa. The congestion at the Panama Canal is expected to lead to increased transportation costs for overland trucking and rail transport within the United States, further fueling price increases across consumer goods. With a high probability of El Niño persisting until next year, global supply chain instability and upward pressure on prices are likely to continue.
