The squat effect is the hydrodynamic phenomenon by which a vessel moving through shallow water creates an area of reduced pressure that causes the ship to increase its draft and thereby be closer to the seabed than would otherwise be expected. This phenomenon is caused by the water flow which accelerates as it passes between the hull and the seabed in confined waters, the increase in water velocity causing a resultant reduction in pressure. Squat effect from a combination of vertical sinkage and a change of trim  may cause the vessel to dip towards the stern or towards the bow. This is understood to be a function of the Block coefficient of the vessel concerned, finer lined vessels Cb <0.7 squatting by the stern and vessels with a Cb >0.7 squatting by the head or bow. 
Squat effect is approximately proportional to the square of the speed of the ship. Thus, by reducing speed by half, the squat effect is reduced by a factor of four. Squat effect is usually felt more when the depth/draft ratio is less than four or when sailing close to a bank. It can lead to unexpected groundings and handling difficulties. There are indications of squat which mariners and ship pilots should be aware of such as vibration, poor helm response, shearing off course, change of trim and a change in wash.
Squat effect is included by navigators in under keel clearance calculations.