Client Advisory: Panama Canal Update

What's the latest

An unprecedented drought has hit the region particularly hard this season and has forced the Canal Authority to shave around two meters off its maximum draft for its Neopanamax locks. Because of these changes, the Canal Authority is currently imposing surcharges and weight limits on ships traversing the waterway. 

Due to the drought’s impact, the Panama Canal Authority (Canal Authority) also announced a reduction in the average daily number of ships allowed to navigate the canal, lowering the voyage from 35-36 to 32, which is expected to stay in effect through August 21. 

As a result, supply chains for goods frequently transported through the canal are likely to be significantly slowed. According to Waterfront Maritime Services, the vessels in queue for transit and the waiting time has been significantly increased in the Panama Canal since August 3, and some reports state that current wait times at the canal are as much as 21 days. The restrictions are particularly affecting trade between China, Japan, South Korea, and certain regions of the U.S., as the Panama Canal facilitates 46% of container movement from north-eastern Asia to the U.S.

As reported by S&P Global last week, some carriers are splitting shipments across two vessels while others were exploring diverting to trips around Cape Horn. Some of the largest containerships are being forced to offload boxes for transhipment by rail.

Vessels in Queue for Transit in the Panama Canal

LOCKS	BOOKED	NON-BOOKED
NeoPanamax	14	12
Panamax	40	71
Vessels in Queue for Transit	54	83

 

Waiting Time Forecast

VESSEL TYPE	NORTH BOUND	SOUTH BOUND
NeoPanamax	10-11 Days	15-16 Days
Panamax Plus	0-1 Days	1-2 Days
Super	17-18 Days	15-16 Days
Regulars	0-1 Day	1-2 Days

*Tables are taken from https://www.waterfront-ms.com/panama-canal-waiting-times/.

The bottom line

We will continue to monitor the situation and provide timely updates to those impacted. If you have any specific questions about your shipments, contact your SEKO representative directly.

WHAT’S NEXT 

We are your logistics partner, ready and able to pivot quickly in the face of challenging climatic circumstances. Should delays at the Panama Canal persist, our team is prepared to help find alternative routes (e.g., West Coast or Suez Canal re-routes, depending on the point of origin), where necessary and create a solution that works for your business and your customers.

If you have questions, please reach out to your SEKO representative, or email us at hello@sekologistics.com.