Panama canal traffic facing further cuts as drought from El Niño worsens — SkimNews
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- Panama Canal Authority plans to allow an average of 29.5 vessels daily from October, down 18% from 36 in August, under a draft plan submitted to Panama's parliament; September had already cut transits from 36 to 32.
- The canal handles 5% of global maritime trade and 40% of US container traffic, with shippers favoring the route especially for China-Asia-US trades, the source notes.
- In August, a container ship paid about $4m at the canal's daily auction to skip ahead of vessels waiting 10 days—the longest queue since May—with bid prices rising alongside demand.
- El Niño is forecast to peak later this year as the strongest in four decades, raising the prospect of further restrictions on the 82km waterway, whose locks lift ships 26 metres using Lake Gatun freshwater.
- The source attributes added costs and logistical complications partly to US and Israeli conflict with Iran and reported disruption in the Strait of Hormuz, though this framing goes unverified elsewhere.
- In 2023, similar low water levels forced the canal to cut daily transits from 38 to 22, creating a backlog that sent companies scrambling for alternative routes.
Why it matters: The canal's outsized role—40% of US container traffic and 5% of global maritime trade—means even an 18% transit cut amplifies quickly: auction-based priority slots are already commanding $4 million bids for a single crossing. With El Niño forecast to peak as the strongest in four decades, shippers face a likely further tightening of the Asia-US route that the canal typically shortens and cheapens.
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