Panama Canal Cuts Daily Transits As El Niño Risks Increase
The Panama Canal Authority (ACP) has suspended auction processes for transit slots and reduced the number of daily canal crossings from 36 to 34 amid growing concerns over the developing El Niño weather pattern.
The new limit took effect on 25 July, with further reductions expected during August as the region prepares for another potentially significant El Niño season. The phenomenon causes Pacific Ocean temperatures to rise and is commonly associated with prolonged drought across Central America and northern parts of South America.
Forecasters are predicting a greater than 90% probability of a strong or very strong El Niño developing during the final quarter of 2026 and continuing into early 2027. Some projections suggest it could become one of the most severe events recorded since 1950.
Major ocean carriers have already responded to the draft and capacity restrictions by announcing surcharges of US$100 or more per TEU for services passing through the canal, reflecting the possibility of higher operating and transit costs.
The waterway experienced significant 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.
Capacity eventually fell to approximately 21 vessels per day, creating lengthy queues, disrupting shipping schedules and pushing auction prices for priority passages to extremely high levels.
The latest restrictions come as additional pressure is placed on the canal by rerouted fuel carriers avoiding the Strait of Hormuz, while continuing security concerns in the Red Sea have led many round-the-world services to avoid the Suez Canal.
Atlantic Pacific is monitoring developments closely and will keep customers informed of any further capacity restrictions, delays or carrier surcharges.
