Panama Canal Reduces Daily Transits Amid El Niño Concerns
The Panama Canal Authority (ACP) has suspended auctions for priority transit slots and reduced the number of daily canal crossings from 36 to 34 as concerns increase over the developing El Niño weather pattern.
The new restriction came into force on 25 July, with further reductions anticipated during August as the region prepares for another potentially significant El Niño season. The weather phenomenon causes Pacific Ocean temperatures to rise and is typically associated with extended periods of drought across Central America and northern South America.
Forecasters are currently predicting a greater than 90% chance of a strong or very strong El Niño developing during the final quarter of 2026 and continuing into early 2027. Some projections suggest the event could become one of the most severe recorded since 1950.
Several major ocean carriers have already responded to the draft and capacity restrictions by introducing surcharges of US$100 or more per TEU for cargo moving through the canal, in anticipation of rising transit and operational costs.
The canal faced major disruption during the severe drought of 2023, when exceptionally low water levels in Gatun Lake, which supplies the canal’s tiered lock system, forced the ACP to progressively restrict vessel drafts and daily crossings.
At its lowest point, capacity fell to approximately 21 vessels per day, creating lengthy queues, disrupting schedules and pushing auction prices for priority passages to extremely high levels.
The latest restrictions come as the canal also faces increased pressure from fuel carriers rerouted away from the Strait of Hormuz, while continuing security concerns in the Red Sea have led many round-the-world services to avoid the Suez Canal.
Killick Martin is monitoring the situation closely and will keep customers updated on any further transit restrictions, delays or carrier surcharges.
