Panama Canal Authority warns restrictions will remain in place throughout 2024
The Panama Canal Authority (ACP) has claimed that the tide has turned in its ongoing battle to get back to normal operations, following a debilitating year of drought-induced cuts to drafts and transits.
“Current forecasts indicate that steady rainfall will arrive in late April and continue for a few months. If this remains the case, the Canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025,” the ACP stated in a release yesterday, adding: “Recent precipitation and progress secured by the Canal’s ongoing water-saving efforts are turning the tide.”
Splash has been reporting on the ACP’s decision to slash daily transits and draft levels since May last year. The persistent drought, made all the worse by the El Niño weather phenomenon, saw a huge swathe of the global merchant fleet decide to avoid the waterway over the long queues and high toll fees. This was then compounded late last year when for the first time in shipping history, the Suez Canal became dangerous territory thanks to the Houthis from Yemen targeting merchant ships in and around the Red Sea in a campaign designed to bring pressure for a solution in the ongoing war between Israel and Hamas.
Three weeks ago the ACP added three extra slots per day at its panamax locks, taking the total daily maximum transits to 27, still more than 10 shy of the waterway’s normal maximum, but a sign that the worst was over.
Danish liner giant Maersk gave its own indication of the improving water levels along the canal last week, announcing the reinstatement of a service that had previously switched to a rail land transit across the Central American country at the height of the drought crisis.
“All modifications to restrictions will be contingent on the forecasts. If rains are short of expectations, the Canal could retain or apply further restrictions to either daily passage or draft,” the ACP cautioned yesterday. However, moderate precipitation is expected to arrive later this month and grow in intensity, which the ACP said would allow the canal to progressively increase daily slots back to the 36 daily transits typically offered during the rainy season.
The ACP also gave ship operators an update on auction prices for extra slots, something that shot up dramatically last year.
The ACP claimed yesterday auction prices have levelled off, and are generally near normal levels today.
Restrictions on transits through the Panama Canal, which accounts for 2.5% of global trade, have seen tonnage transits down by a third, according to data from Clarksons Research.
Latest projections from the ACP show projected water depths at Gatun Lake, the vital piece of water in the middle of the canal, will start to climb towards the end of May as the rainy season kicks in.
“We are all at the mercy of climate change and weather phenomena such as El Niño,” commented Peter Sand, chief analyst at Xeneta, a container freight rate platform.
