A huge traffic jam at the Panama Canal could take at least 10 months to clear up — and it'll likely screw up your holiday shopping

  • A traffic jam in the Panama Canal could take at least 10 months to clear up, new data shows.

  • The wait time to get through the canal has increased massively for ships.

  • Holiday shopping will likely be impacted, with higher prices and out-of-stock items.

Drought conditions causing a massive traffic jam in the Panama Canal have been extended for at least 10 months, meaning that holiday shopping will likely be sorely impacted as ships crawl through the canal at a slow pace.

According to new data shared with Insider by supply chain visibility startup Project44, the wait time for ships that haven't been booked with the canal has increased 280% since June.

It used to take a vessel about two-and-a-half days to pass through the Panama Canal, but now ships are taking an extra week to make it through, averaging a nine-and-a-half day journey.

Since ships are taking much longer to move through the body of water, delayed shipments will likely screw up holiday shopping plans.

"Current drought regulations for the Panama Canal have been extended for at least the next 10 months, meaning the restrictions will likely impact this year's holiday shopping," Jenna Slagle, Senior Data Analyst at Project44, told Insider.

"We're in the thick of peak shipping season – the time of year when retailers ramp up shipping in anticipation of increased demand with holiday shopping season," Slagle said.

Slagle added that there are already "severe restrictions" on the number of ships that can pass through the canal and the amount of cargo each ship is allowed to carry, resulting in huge wait times to pass through, especially for those ships without proper bookings.

Project44 said that the delays are mostly falling on those ships without booking appointments with the Panama Canal Authority. Shippers familiar with the route who "proactively schedule appointments and maintain robust communication channels with the canal are experiencing significantly fewer disruptions compared to those who infrequently use this route," the organization said.

But, Salgle added, "As the delayed ships gradually arrive at their intended destination, we expect to see downstream effects on holiday shopping with out-of-stock items."

Additionally, the Panama Canal Authority might place a higher price on ships passing through the canal, so shippers might have to use smaller boats to transport their goods. Either way, higher prices for the ships likely mean higher prices for the items they're bringing to your area, Slagle explained.

"This overall rise in shipping costs could be passed along to consumers, ultimately driving up the prices of goods and services that depend on this crucial maritime route," Slagle said.

The Panama Canal traffic jam can be chalked up to unprecedented conditions in Panama. The canal relies on rainwater to replenish itself, but a lack of rain this summer has made it harder for ships to get through.

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