THE IMPACT OF THE PANAMA CANAL DISRUPTIONS ON INTERNATIONAL TRADE

Tamari Poladashvili

E-mail: tamari.poladashvili@bsu.edu.ge

Assistant Professor, Batumi Shota Rustaveli State University

Batumi, Georgia

https://orcid.org/0000-0002-7597-7997

Iakob Makharadze

E-mail: Iakob.makharadze0104@gmail.com

Master of Economics, Batumi Shota Rustaveli State University

Batumi, Georgia

Abstract: Maritime transport hubs are vital for the development of international trade. Their disruptions can have far-reaching effects on global trade. The Panama Canal is one of the most important ports in the world. Due to the drought caused by the El Niño phenomenon in 2023, due to the record low depth of Lake Gatuna, the Panama Canal Agency imposed restrictions on daily transits, which significantly reduced the volume of transported cargo, significantly changed the scale of international trade and negatively affected the trade indicator of Central and South American countries due to restrictions imposed on ships crossing the channel. Some have to use alternative routes, which causes cargo delays, further strains international supply chains, increases transportation costs and freight prices. The purpose of the article is to research the impact of restrictions imposed in the Panama Canal from 2023 on such aspects of international trade as: maritime trade routes, transportation costs, pressure on supply chains, impact on regional economies, and others.

Quantitative analysis of primary, secondary and tertiary sources is used in the article. The discussed issue is multi-layered and located at the intersection of several disciplines, which requires consideration of many factors. The study focuses on those variables that provide the clearest picture of the impact on aspects of international trade following the imposition of restrictions on transit through the Panama Canal. Statistical data is compiled from reports in the Panama Canal Agency database, data posted on PortWatch, and others.

Cross-referencing of information from different sources was used to confirm the accuracy and reliability of the findings. It was possible to find and confirm common findings in the research process by comparing data obtained from different types of sources through the triangulation technique.

The study found that the Panama Canal restrictions are less burdensome for container ships, crude oil tankers and LNG tankers because they agree to pay additional fees to book transit through the canal. The imposed restrictions are more severe on ships with low operating costs and prefer to use alternative trade routes.

Key words: International trade, International trade policy, Competition, International trade organizations.

JEL classification: F1, F2, F13