The Panama Canal, a vital route for approximately $270 billion worth of cargo annually and responsible for 40% of all US container traffic, is facing a severe drought exacerbated by climate change and infrastructure limitations. The water levels have dropped to a critical point, leading the Panama Canal Authority to impose restrictions on the number of ships allowed to pass each day. This has resulted in longer queues, prompting some shippers to pay to expedite their passage or seek alternative routes.

Possible remedies for the water level issues in the Panama Canal include exploring experimental concepts and considering the contentious proposition of building a new reservoir. The latter option would necessitate flooding adjacent lands. The need to tackle the water level challenges is becoming more pressing as the congestion at the canal intensifies.