- The cost for shippers to bypass Panama Canal congestion has dropped significantly, with Neopanamax slots averaging $269,000 due to reduced demand amid alternative route preferences.
- This shift is influenced by drought conditions and heightened security concerns in critical waterways like the Red Sea and Suez Canal.
The expense for shippers seeking to bypass congestion at the Panama Canal has significantly dropped from recent multimillion-dollar highs.
Operational Cutbacks and Ongoing Drought
The canal has reduced its daily operating slots by two-thirds due to an ongoing drought intensified by El Niño. This jeopardizes the canal’s freshwater supply and is expected to persist until the rainy season in May or June.
Auction Price Decline for Neopanamax Slots
As of Jan. 11, the average auction price for Neopanamax slots, catering to the largest tankers allowed through the canal, stood at $269,000. Vessels transporting liquefied natural gas are part of this category.
Reduced Demand and Security Concerns
Panama-based Francisco Torné from Waypoint Port Services noted that the reduced final auction prices are a result of minimal bidders for Neopanamax slots. In November, these slots were auctioned for nearly $4 million, showcasing a substantial drop in demand due to vessels opting for alternative routes, diverting away from the Panama Canal. The global shipping landscape is further disrupted by heightened security concerns in the Red Sea and Suez Canal, prompting shippers to seek alternate pathways.
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Source: Ajot
