World's Biggest Traffic Jam

 

The World's Biggest Traffic Jam Has Begun

A 150-Year-Old Stalemate

For more than 150 years, a massive traffic jam has been standing in the sea. Cargo ships are attempting to take shortcuts, trying to navigate through the Panama Canal.

The High Cost of Passage

Interestingly, for every ship that passes through the Panama Canal, a fee of $100,000 must be paid to the Panamanian government. Despite being ready to pay this amount, authorities still do not allow them to pass through the canal.

No Maintenance or Engineering Issues

There is no maintenance work going on in the canal, nor is it closed due to engineering issues. The miracle of the Panama Canal, which the whole world is proud of, is now facing a significant crisis, a battle against nature itself.

Alternative Routes and Global Impact

Once again, a situation is developing where ships are trying to navigate through shortcuts over the seas. There are two major shortcuts for global shipping. One is the Suez Canal in Egypt, which connects East Asian countries like China, Japan, Taiwan, and Singapore to Europe. Similarly, if foreign ships from these countries need to go to America or East Canada, or from Europe to West America, they use another shortcut—the Panama Canal.

Heavy Dependence on Shortcuts

There are approximately 50,000 cargo ships in the world, and 70% of them use these two shortcuts. If for any reason the Suez and Panama Canals become unusable, the impact will be felt globally, as seen in 2021 when the Ever Given ship blocked the entire Suez Canal traffic for six days. A similar future scenario would force ships to take longer routes, increasing time and fuel costs, which ultimately affect end users.

The Necessity of Toll Tax

The heavy toll tax paid by shipping companies to canal authorities is a necessity. Imagine a ship from the United Kingdom heading to San Francisco. The traditional route would involve crossing the North Atlantic Ocean, rounding the southern tip of South America, and entering the Pacific Ocean, a distance of over 25,000 km, taking 28 days and consuming 80 lakh liters of fuel. This would cost the shipping company $32 million. Alternatively, using the Panama Canal, the distance is reduced to 14,000 km, saving time and fuel costs.

Current Toll Tax Rates

Currently, a ship passing through the Panama Canal pays a toll tax close to $4 million, sometimes even $800,000 to $1 million, yet ships prefer this route to save time. Reducing the number of trips a ship can make from 24 to 12 annually due to longer routes significantly impacts bookings and profits.

Water Conservation Measures

However, the issue now is that the Panama authorities want to manage the number of ships passing through the canal to conserve water from Gatón Lake. The canal uses fresh water to operate its locks, essential for both canal operations and local drinking water. During dry seasons, the Panama Canal faces severe water shortages. In 2023, there was minimal rainfall, and 2024 is expected to be similar, forcing authorities to limit the number of ships to conserve water.

Government Measures

The government has taken measures to save Gatón Lake's water by reducing the number of ships passing through the canal from 38 to 18 per day and allowing only those with fewer containers. This has led to long waiting times for ships, increasing costs and delays in cargo delivery.

Proposed Solutions

Several proposals are being considered to address this issue, such as building inter-oceanic corridors in Mexico. This project aims to create a rail network and modern ports, providing an alternative route that is expected to be cheaper and faster than the Panama Canal by 2030.

The Uncertain Future of the Panama Canal

However, the future of the Panama Canal remains uncertain. With climate change affecting rainfall patterns, the canal's operation is under threat. It is crucial to find sustainable solutions to ensure the canal's continued operation without compromising essential resources.