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Panama Canal drought limits could boost cargo accumulation risk
Marsh webinar experts said the canal handles about 5% of global maritime trade and roughly $270 billion in US cargo each year, raising insurance concerns as rerouting concentrates goods at alternative ports.
Drought-linked restrictions at the Panama Canal could trigger a broader cargo accumulation problem for marine insurers, as ships are rerouted and goods concentrate at alternative ports, experts warned during a Marsh webinar on El Niño and global supply chains.
The canal carries about 5% of global maritime trade annually, including roughly $270 billion in US cargo, and it relies on rain-fed Lake Gatun, making it particularly exposed to drought connected to El Niño.
According to Sadie Frank of N4EA, container shipping was already showing strain, with some vessels reportedly paying millions of dollars in recent months to move ahead in the canal queue as capacity tightens and competition for transit slots increases.
In this heightened risk environment, experts said shippers are taking proactive steps that can raise overall transport costs, and insurers may face added underwriting exposure where rerouted shipments build up.