Panama Canal Plans Two More Decreases in Neopanamax Draft Levels

After taking what was called a preemptive step in June to lower the maximum drafts of vessels, the Panama Canal Authority announced it will step down the draft levels in two stages in July and August. It is attempting to plan and manage water levels as forecasters continue to expect one of the most severe El Niños in recent years.

In an announcement dated July 1, the Panama Canal Authority reports the steps are part of a water management strategy. It says it is closely monitoring water levels in Gatun Lake, which is the primary reservoir of the canal’s operations.

The maximum draft for the largest vessels, which transit the Neopanamax locks, will be lowered another half a foot on July 24 to 49 feet. It further anticipates lowering the draft another half a foot on August 15 to 48.5 feet. It is falling from the normal 50-foot draft, which had been maintained this spring.

While the restrictions are starting, they are less significant than during the prior drought in 2022-2023, when they announced repeated steps lowering the draft to the 43-to-44-foot range and going to a low of 38.5 feet. The restrictions leveled off, but instead, the number of daily transits was lowered.

The result of the restriction last time was growing backlogs and skyrocketing bids in the auction for booked slots. Large gas carriers diverted around South America while larger containerships offloaded boxes to be transshipped across the Isthmus.

The authority hopes to avoid some of the disruptions by acting early in the management cycle. Its online dashboard shows the operations are currently running smoothly. There are 10 ships without reservations waiting as of July 6, while 65 ships with booked slots are standing by off the canal’s terminuses. Currently, the waiting time for non-booked vessels is 4 days Northbound, which is down from a peak of 11.5 days last month. Southbound, the waiting time is 1.8 days, down from a peak of 15 days in June.

Volume at the canal surged this year after the closure of the Strait of Hormuz and the disruptions in the region. There were reports of record prices being paid at the auction of available transit slots.

The Panama Canal Authority says it appreciates the continued understanding and cooperation of the maritime community.