Tanker paid record $5.3 million as canal authority rationed transits for water

Espino de Marotta began her tenure Monday as administrator of the Panama Canal Authority, taking charge of the 50-mile marine shortcut between the Pacific and Atlantic oceans at a moment defined by one of the strongest El Niño weather patterns in decades and persistent U.S.-China competition over global shipping routes.

The canal handles roughly 40% of U.S. containerized trade. Its reservoir system simultaneously supplies drinking water to about half of Panama’s population — a dual obligation Espino de Marotta cited in explaining why the authority is reducing daily transits to preserve the freshwater supply.

“We own and regulate the Panama Canal lakes that provide water for shipping as well as drinking water for 50% of the country,” Espino de Marotta told The Wall Street Journal’s Logistics Report. “We reduce daily transits so we don’t have to tell the population, ‘There’s not enough water for you guys.’”

Persistent low rainfall has reduced freshwater levels in the canal, limiting how many ships the waterway can carry each day. The resulting scarcity helped push one tanker to pay $5.3 million for priority passage — a record Espino de Marotta discussed with the WSJ.

Espino de Marotta, a marine engineer by training, joined the canal in 1985 when it operated under U.S. administration. She witnessed its handover to Panama in 1999 and rose through the authority’s ranks, eventually overseeing a project to widen the waterway so it could accommodate larger ships.

The waterway remains at the center of a geopolitical struggle between the United States and China over control of global trade routes. Espino de Marotta takes over as that competition continues and as El Niño conditions forecast to be the strongest in decades put additional pressure on the freshwater system.

The shipping pressure extends beyond the canal. Average global airfreight prices rose 24% in August from a year earlier, according to the data firm Xeneta.

Espino de Marotta is familiar with both the environmental and geopolitical challenges the canal now faces, according to the WSJ Logistics Report.