- Ship capacity transiting the canal (Sep 2024–Jan 2025) was 10% below the 2019-22 average.
- Past restrictions (Jun 2023–Sep 2024) limited transit slots and ship draft.
- Dry bulk and LNG transits remain low due to shifting trade patterns and alternative routes.
- US grain exports from the West Coast have increased, reducing canal reliance.
- LNG ships face safety restrictions, making other routes more attractive.
Between June 2023 and September 2024, the Panama Canal imposed transit limits due to low water levels in Gatun Lake. These restrictions affected both the number of ships and their allowable draft, leading to increased competition for limited slots. Container ships, which operate on fixed schedules, secured priority bookings, while auctioned slots often favored the highest bidders, according to BIMCO.
Shift in Trade Patterns and Alternative Routes
Higher transit fees, evolving trade patterns, and operational adjustments have contributed to reduced canal transits. Many dry bulk and LNG ships now opt for longer routes around the Cape of Good Hope or Cape Horn, increasing tonne-mile demand.
For dry bulk, the US has shifted grain exports to West Coast ports, bypassing the canal. Since September, shipments from the West Coast to Pacific ports have risen 21% year-over-year, while Gulf shipments have declined by 6%. Coal transits also remain below pre-restriction levels, with ships continuing to favor alternative routes.
Challenges in the LNG Sector
LNG ships face strict transit limitations, including a low number of available slots and a ban on overnight transits. Safety concerns have made operators prefer alternative, more flexible routes like the Cape of Good Hope.
Outlook for Panama Canal Transits
Despite slow recovery in some sectors, overall canal traffic is expected to grow. Container, LPG, and car carrier transits have already surpassed historical levels. However, dry bulk transits remain uncertain due to competition between US and Brazilian grain exports and weak coal demand.
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Source: BIMCO
