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The following is an update on the current situation at the Panama Canal. We are sharing this information because importers should be aware that ships navigating the canal continue to face substantial delays and potential fees.
You may already know that the Panama Canal Authority (ACP) has been restricting vessel traffic for several months as severe drought has limited the water needed to operate its lock system. Presently, only 22 daily transits are authorized, which is down from the 35 typically allowed. And beginning in February, transits will be reduced to 18 a day.
The authority is offering the few available slots to its top customers first with any scheduled slots coming available being put to auction. With demand exceptionally high, however, some slots are being sold for $1 million or more.
The alternatives are not ideal, either, including some ships sailing around S. America or Africa, or transiting the Suez Canal to get to the U.S. east coast from Asia. These longer routes can add up to two weeks to shipping times, and elevate other costs such as for fuel.
Not surprisingly, the total number of transits declined 22% in November versus October, according to just-released data from the ACP.
This chart is from a recent Freightwaves article.
The initial effect of the ACP cutting reservation slots was an increase in waiting time for vessels without reservations. That effect is now changing with more ships choosing alternate routes and avoiding the risk of waiting, reducing both the queue and wait time.
Jaguar Freight will continue to monitor the situation and provide additional updates as warranted.
Compliments of Jaguar Freight – a member of the EACCNY.