Panama Canal Reverses Cuts in Daily Transits and Adjusts Reservations
The Panama Canal Authority is delaying some of the scheduled reductions in daily transits that it was planning to implement starting next month due to slight improvements in the reservoir’s water levels and at the same time further adjusting its system for reservations. The changes come as good news for the shipping industry which increasingly diverting vessels as the conflict in the Red Sea threatens to choke off a critical alternate route.
The announced changes will restore two slots that had been removed from the daily transits for a total starting in January 2024 of 24 daily transits. The Panama Canal is currently restricted to 22 transits split with six at the Neopanamax locks and 16 at the Panamax locks. The plan called for the number of slots to be lowered to 20 in January and further reduced to 18 in February. The Panama Canal Authority highlights that today’s announcement allows for an increase of six daily slots above the projected low that was scheduled to take effect in about six weeks. It adds 30 percent from the previously announced daily low starting in February.
November’s rainfall was less adverse than projected by the forecasters plus the Panama Canal Authority highlights the positive outcomes of its water-saving measures. They implemented steps ranging from water recycling to short locking to decrease the amount of water lost from each transit.
They continue however to highlight that October 2023 was the driest October on record in Panama. Based on that, forecasters had projected a potential worsening of the water situation in Gatun Lake in November and December. As 2023 comes to a close, it however is still going to be the second driest year recorded in the history of the Panama Canal watershed.
The decision to reverse the anticipated further restrictions is also a business issue for the canal which is experiencing a decline in revenues. Shipping companies had been critical of the long delays for ships without reservations or the skyrocketing cost of slots in the daily auctions.
The wait has declined with the overall average for the past 30 days down to 5.4 days northbound and 7.9 days southbound for all types of vessels arriving without a reservation. There are just 23 vessels without reservations waiting as of December 15 and another 41 with slots booked now in the queue. The authority has been encouraging more companies to book slots to ease the wait.
Starting next week for the Neopanamax locks, it will be added one additional slot into the booking system for transits beginning on January 16 and later. They are also starting in January adding two slots to the Panamax locks reservations for transits starting in mid-January. They are also making other adjustments to the administration of reservations, including a limit of one booking slot per customer per date, and priority when assigning booking slots to full container vessels. Laden boxships will go ahead of LNG and LPG carriers, vehicle carriers or Ro/Ros with further priority being granted based on customer ranking.
The Panama Canal Authority says the adjustments to the reservation system are being implemented to provide a more equitable and fair distribution of slots. Companies they believe will have a better chance of obtaining a reservation.
They will continue to closely monitor water levels and reserve the right to further adjust operations, but the hope is to ease some of the frustration and permit more vessels through the Panama Canal on a daily basis.