Canada is on fire. The skies of New York are sci-fi orange. Phoenix is running out of water. And raging atmospheric rivers of rain and snow complicated life in the West all winter.
What else could go wrong for people who just want to sell cars?
Supply chain logistics experts are keeping a worried eye on the skies over Panama — hoping for rain. Believe it or not, that situation has a bearing on the smooth flow of the North American auto industry.
Panama has been in a severe drought for months. May was the driest month since 1950.
A lack of rain in Panama translates to less water streaming into Panama's Gatun Lake. Less water in the lake means less water flowing into the Panama Canal, which means its depth is reduced. And that means fewer big cargo ships can go through, back and forth between the Atlantic and Pacific Oceans.
The canal conducts 45 million tons a year of what the shipping industry calls "roll-on-roll-off" cargo, meaning vehicles. And besides that, there are materials, auto parts and petroleum products, according to the Panama Canal Authority.
The drought is already affecting traffic there, says Charles Klein, head of the Detroit bureau of the global logistics advisory company OEC. The lower water level will lead to longer shipping times for auto supply lines as well as higher costs.
Just when you thought things were getting back to normal.
