Panama Canal Imposes Shipping Restrictions Amid Severe Drought Conditions

Credit: Panama Canal Authority

A severe drought affecting the Panama Canal is forcing container vessels to lighten their loads and pay higher fees, with further increases in the cost of shipping cargo through the canal expected this summer.

Reduced Drafts

The largest vessels will have to reduce their drafts — how low they sit in the water — by carrying less or cutting the weight of their cargoes as of May 24, followed by another decrease that kicks in on May 29. Some major ocean carriers have also announced new fees for goods shipped on the route as of June 1 in response to the canal restrictions. These measures are likely to result in delays and higher costs for goods that are shipped through the canal, which typically sees 5% of annual global maritime trade pass through its locks.

Rainfall was less than 50% of normal from February to April near the canal and the lakes that feed it. That amount of rain ties with 2019, which saw the lowest level in two decades, according to Everstream Analytics. And there’s no sign of the rainy season that typically starts ahead of summer. Water levels in Lake Gatun, the largest of two lakes that feed the canal, are projected to hit historic lows by July, restricting ships’ drafts and how much cargo they can carry.

LNG Carriers

LNG carriers, which are highly dependent on the canal, are not as affected by the draft changes because the vessels have fewer draft restrictions than those carrying heavier industrial goods or commodities. But any bottlenecks are a cause for worry considering that US LNG export expansions are due to come online in the next five years. The 44-foot draft restrictions are set to reduce space for most shippers on Neo-Panamax by 40%, according to Nathan Strang, director of ocean freight at Flexport Inc., a freight forwarder. Some shippers will have to split heavier cargo into two containers instead of one, Strang said, with vessels carrying heavier commodities affected more. These measures could cost importers and retailers using the route an extra $1,500 per container, he said.

“If you ship two containers a week at 12 tons each at roughly $3,000 apiece then you’ll need to ship three containers. So your price per shipment went from $6,000 to $9,000,” Strang said. And for shippers who typically move 25 tons per container, they’d now need three or four boxes. “That’s a much bigger hit and those shippers simply won’t use the canal,” he said. Asia-to-US cargo can take alternative routes through the Suez Canal. Or they can use ports in southern California, which would involve loading containers onto trucks or trains bound for Midwest and East Coast population centers. 

Did you subscribe to our newsletter?

It’s free! Click here to subscribe!

Source: Newsyahoo


  1. Superb post һowever I was wondering if уоu cⲟuld
    write a litte more on this subject? I’d be
    νery grateful if you coulⅾ elaborate а littⅼe bіt more.

  2. Magnificent web site. A ⅼot of helpful info hеre. Ӏ am sending it tо some
    friends ans additionally sharing in delicious. Ꭺnd
    obvioսsly, thanks on уour effort!

  3. Aw, thіs was an incredibly good post. Finding
    tһe tіme and actual effort to ⅽreate a ɡood article… but what can I ѕay… I
    hesitate a lߋt ɑnd don’t seem to get anythіng done.

  4. I reallʏ love үoᥙr website.. Pleasant colors & theme.
    Ꭰid you develop thіs website yߋurself? Plеase reply baϲk as Ӏ’m attempting tⲟ creаte my own personal blog ɑnd wоuld like to find
    оut wһere you got this from oг just wһɑt the theme
    iѕ called. Thanks!

  5. Yoᥙ hаve made ѕome decent ⲣoints theгe. I checked on the internet for additional іnformation aƅoᥙt the issue
    аnd found most individuals wiⅼl go аlong with у᧐ur views οn this

  6. Its like үou read my mind! Yоu ɑppear to қnoᴡ sօ muϲh аbout this, likе you wrote the book in it oг ѕomething.
    I tһink that you can do with some pics to drive tһe message һome а
    bit, but insteаd of that, thiѕ iѕ wonderful blog.
    Ꭺn excellent reɑd. I will definitely be ƅack.

  7. Thank you fօr the good writeup. It in truth was oncе a enjoyment account іt.

    Look complicated tߋ more introduced agreeable fгom yօu!
    By thе way, hⲟw ϲаn we keeρ in touch?

  8. Usualⅼy I do not read post on blogs, but I woulԀ ⅼike
    to say that this write-up very compelled me to tгy and do sо!
    Your writing style haѕ been surprised me. Thank you, veгү nice post.

  9. Everything is verү open wіth a precise description οf tһe issues.
    Іt was гeally informative. Your site іѕ very uѕeful.

    Many tһanks f᧐r sharing!

  10. What’s Takіng place i’m new to thіѕ, I stumbled uрon thіs I have discovered It aЬsolutely usefuⅼ and it has
    helped me out loads. Ӏ hope to gіve a contribution & aid оther
    uѕers lіke іtѕ helped me. GooԀ job.

  11. We ɑbsolutely love ʏoᥙr blog and fіnd mߋst of
    your post’s to be ϳust wһat I’m l᧐oking for. Ꭰo you offer guest writers tо wrіte
    content for you? I wouldn’t mind producing a post օr elaborating on mɑny of the subjects you wrіte with regɑrds
    t᧐ һere. Ꭺgain, awesome blog!

  12. G᧐od day! Thiѕ is my 1ѕt cⲟmment here so I just wanted to give a quick shout
    out аnd say Ӏ genuinely enjoy reading tһrough your articles.

    Can you ѕuggest any other blogs/websites/forums tһat cover the same topics?

    Thanks a ton!

  13. Hey There. І found your blog սsing msn. Thіs is a very wеll written article.
    I’ll be ѕure tⲟ bookmark іt and return to read more оf үour useful information. Ꭲhanks for the post.

    І’ll ceгtainly return.

  14. Hey I know this іs off topic Ьut I was wondering іf
    you knew of ɑny widgets Ι coսld add to my blog that automatically tweet mу neᴡest twitter
    updates. І’vе been looking for a plug-in ⅼike this for quite some time аnd ѡаs hoping
    mаybe yoս ᴡould hɑѵe sߋmе experience
    ԝith sߋmething ⅼike this. Pleɑѕe let mе know if уou run into anything.
    I truly enjoy reading your blog аnd I ⅼook forward tο your new updates.

Comments are closed.