The Panama Canal is seeing signs of a rebound in global trade as ship transits recover from the depressed levels caused by the pandemic.

Total transits through the waterway rose to 933 in July, from 845 in June, which was the fewest since the canal opened an expanded set of locks four years ago to accommodate bigger ships.

Initial August numbers show further improvement, Canal Authority Deputy Administrator Ilya Espino de Marotta said in a phone interview.

Container shipping between the U.S. and Asia, the canal’s most important route, began to increase this month, she said. But cruise ships continue to cancel their slots, and the trade in Liquid Natural Gas may also take more time to recover, she added.

“If you go by segment we think containers might recover strongly, cruise liners not at all,” Espino de Marotta said.

More than 3% of the world’s maritime commerce transits the waterway, according to Fitch.

$2 Billion Investment

The canal’s locks are fed mainly by water from Gatun Lake, which also provides drinking water for Panama City. A series of droughts in recent years has caused the lake’s water levels to dip, forcing the canal to implement water-saving measures and restrict the depth of ships crossing the canal.

The canal authority has researched alternative water sources including nearby rivers and reservoirs they could potentially tap. The authority will open bidding in the next two months for feasibility studies for projects to tap new water sources, Espino de Marotta said. These will require an investment of as much as $2 billion, she added.

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