(Yicai) Nov. 13 -- Container traffic going through the Panama Canal, a major trade conduit between the United States and China, is expected to stay limited till the end of next year after the driest October since 1950, according to industry insiders.

The restrictions that the Panama Canal Authority is implementing are predicted to last for another year after this one. If freight companies want to jump to the front of the line, they have to pay millions of US dollars.

The impact of a severe El Nino weather system this year is already affecting shippers delivering goods mostly to the United States or heading east from there. Eneos Corporation, a Japanese energy company, recently paid nearly USD4 million to gain priority access. Thereby, SunnyBright, a vessel carrying liquefied petroleum gas, will travel through the canal on Nov. 15. 

The US is the biggest user of the Panama Canal as around USD270 billion of US imports and exports make up 73 percent of the canal's total transport volume, per the ACP. 

There is a capacity shortage of container space headed to the eastern regions of the States as fewer vessels are allowed to pass every day and ships need to be lighter, Luo Jie, an expert in freight forwarding in California, told Yicai. 

The Panama Canal works with locks and 200 million liters of freshwater is required every time a ship passes, a rare resource due to the drought. Each day, the canal can handle 24 ships right now but that might be reduced to 20 or even lower early next year.

The rainy season is over in the Central American country and water levels are not back to normal so the trade conduit keeps adding uncertainties to delivery times. Last month, the average time that northbound and southbound vessels spent waiting by the canal was 5.3 and 5.6 days, respectively, both reaching record highs, according to official data. This is why many bulk carriers choose an alternative route, the Suez Canal, which means longer but more predictable journeys.

Christmas season is around the corner. However, American department stores are not desperate to replenish their inventories because they are not optimistic about sales for the last weeks of this year, per Luo who specializes in US logistics. Evidently, in June, Macy’s lowered its sales outlook for this year, expecting sales to decline by 6 or even 7.5 percent year on year.

Editor: Emmi Laine