The Panama Canal continues to ease the daily transit restrictions as water levels rise, with the canal’s authority officially raising the number of ships passing through to 31 on Thursday.
But as the levels keep rising, the impact of the drought that hit the Panama Canal will be felt “for years rather than months,” says ocean and air freight benchmarking platform Xeneta.
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As of Thursday, official water levels at the rainfall-fed Gatún Lake were 80.6 feet deep—1.9 feet shallower than May’s 82.5-foot average since 2019. The gap has been closed significantly since January, when there was a 5.5-foot average differential.
“The situation is clearly improving and compared to a fortnight ago the Gatún Lake water level is half a foot higher,” wrote Peter Sand, chief analyst at Xeneta, in a blog post. “But only allowing 31 ships to transit is still impairing businesses with supply chains which transit of the Panama Canal—especially at a time when the Suez Canal is being avoided by the majority of container ships.”
Sand noted that schedule reliability remains “disappointingly low” due to the canal’s congestion, which began last summer when the months-long drought forced the Panama Canal Authority (ACP) to implement its first restrictions.
Using the Far East-to-U.S. Gulf Coast as an example, he pointed out that schedule reliability hovered around 60 percent pre-pandemic, before plummeting to 20 percent during the pandemic before recovering to 40 percent as the impact of Covid-19 began to alleviate.
“It has remained around that level ever since in no small part due to the situation in the Panama Canal, with three out of five ships arriving late at the destination by more than one day,” said Sand. “The number of days these ships were late has also increased from three days pre-pandemic to six days currently.”
By June, one more ship will be allowed to reserve a spot to sail through the 50-mile waterway, bringing the total to 32. Under normal circumstances, 36 to 38 vessels are allowed to be booked to transit the Panama Canal per day.
On June 15, the draft limitations for ships transiting the newer Neopanamax locks will increase from 44 feet to 45 feet.
“Carriers and shippers will be looking forward to the day when it reaches 50 feet, which is the normal, undisrupted draft limit,” Sand said.
The ACP said last month that it expects the waterway to return to normalcy by 2025, but that this would be contingent entirely on if the expected rainfall lingers throughout the 2024 May-to-November rainy season.