Climate Crisis Strikes a Blow to Global Supply Chains: The Panama Canal Drought Crisis

The Panama Canal, a linchpin in global trade, is grappling with severe delays due to an unprecedented drought. This water shortage has compelled the Panama Canal Authority (ACP) to impose restrictions on the number of ships that can traverse the canal daily, causing a ripple effect on international commerce.

This situation underscores the far-reaching consequences of climate change on the global business landscape. The ACP has been forced to limit the daily average of transiting vessels to 32, a decline from the usual 36, due to the scarcity of water needed for the canal’s lock systems. This has led to a surge in the number of ships anchored near the canal, waiting for their turn to pass.

The ACP describes the current drought as unparalleled, even when compared to the previous one in 2019-2020. These restrictions have not only created a bottleneck but also compelled companies to seek alternative shipping routes, adding to operational complexities and costs.

Maritime tracking data revealed around 140 ships near the canal recently, a significant uptick from the usual 90 during the rainy season. However, this number has slightly decreased, possibly indicating that efforts to alleviate the backlog are taking effect.

To manage the situation, the ACP has temporarily amended its reservation policies to accommodate more ships without prior bookings. These measures are expected to last until 21 August and aim to expedite the passage of ships through the canal’s older locks, which are typically used by smaller vessels.

Ricaurte Vasquez Morales, the administrator of the Panama Canal, emphasized the importance of transparent communication with stakeholders to manage expectations and facilitate informed decision-making.

The climate crisis is not only affecting the Panama Canal but also other key shipping routes like the Rhine in Germany. Analysts warn that these disruptions could lead to increased short-term shipping rates and necessitate changes in supply chain strategies.

The unfolding situation serves as a stark reminder of the urgent need to address climate change, as its impact on crucial infrastructures like the Panama Canal can have far-reaching implications on global trade and economy.




New World Norm Logistics Risk Management  team assesses exposures, and measures the likely losses.

For unacceptable risk exposures, the team
recommends cost-effective solutions.

The circumstances that lead to cargo and stock losses will differ for each organisation according to the method of shipping, transportation, and the warehouse management.

We know from our vast experience and insights that  key areas, such as cargo, route, storage, driver, and vehicle, when studied, can help analyse the causes of cargo losses.

Once the causes are known, all or most cargo losses can
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Stock management


Stock management is at the core of every good-based business, whether it operates with B2C or B2B. 

Inventory management is a pressing concern for any business. Even though you practice the best inventory monitoring strategy, the errors keep continuing to impact your business. 

It has been reported that 25% 0f the inventory differences occurs due to administrative errors, resulting  in excessive workload across the business.

Some businesses report their accuracy rate at 86% which has a direct to poor replenishment cycle, under performing sales and the customer experience and retention.

New World Norm evaluate all of these impacts as part of designing your strategy, which will add benefit across the entire business.

Inventory management


Inventory management is vital to a company’s health because it helps ensure that the business have the correct stock availability to support sale growth without overstocking and impacting cash flow or further discounting out of season stock.

At New World Norm we have setup clients Stock Inventory Management across 31 countries and strategically driven the entire supply chain to maximise sales, profit and Customer satisfaction.

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Our understanding of how a world class supply chain should operate places us as an effective partner.

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