The drop in Panama Canal traffic due to a severe drought could cost up to $700 million

abcnews.go.com:

A severe drought that began last year has forced authorities to slash ship crossings by 36% in the Panama Canal, one of the world’s most important trade routes

PANAMA CITY — A severe drought that began last year has forced authorities to slash ship crossings by 36% in the Panama Canal, one of the world's most important trade routes.

The new cuts announced Wednesday by authorities in Panama are set to deal an even greater economic blow than previously expected.

Panama Canal Administrator Ricaurte Vásquez now estimates that dipping water levels could cost them between $500 million and $700 million in 2024, compared to previous estimates of $200 million.

One of the most severe droughts to ever hit the Central American nation has stirred chaos in the 50-mile (80-kilometer) maritime route, causing a traffic jam of vessels, casting doubts on the canal's reliability for international shipping and raising concerns about its affect on global trade.

“It’s vital that the country sends a message that we’re going to take this on and find a solution to this water problem,” Vásquez said.

The disruption of the major trade route between Asia and the United States comes at a precarious time. Attacks on commercial ships in the Red Sea by Yemen’s Houthi rebels have rerouted vessels away from the crucial corridor for consumer goods and energy supplies.

The combination is having far-reaching effects on global trade by delaying shipments and raising transport costs. Some companies had planned to reroute to the Red Sea — a key route between Asia and Europe — to avoid delays at the Panama Canal, analysts say.

Now, that’s no longer an option for most.

On Wednesday, Vásquez said the canal authorities would cut daily ship crossings to 24, down