Panama Canal imposed shipping restrictions to survive worsening drought

Posted on May 29, 2023   |  

Water levels have sunk at the canal due to extreme drought, pushing container vessels to reduce their cargo and pay higher fees, and this summer, the cost of shipping cargo is likely to increase 

The biggest vessels will have to decline their drafts, cutting the weight of their cargoes as of May 24, after another decrease that kicks in on May 29. 

Some bigger ocean carriers declared new fees for goods shipped on the route as of June 1. 

These measures are likely to delay and increase costs for goods that are shipped via the canal.

The canal unites the Atlantic and Pacific oceans, and it has been struggling with water supply shortages since 2016.

From February-April, rainfall was down 50% of normal for the canal and the lakes that feed it, the lowest level in 2 decades.

Water levels in Lake Gatun are predicted to hit historic lows by July, delaying ships’ drafts. 

From May 24, Neo-Panamax vessels will draft up to 44.5 feet, down from a restricted 45 feet, which will decline again to 44 feet on May 30. 

At least 4 ocean carriers imposed container fees between $300 and $500 per box effective June 1.