No Sign Of Improvement For Panama Canal
The severe drought conditions at the Panama Canal have declined further over the past few weeks, with restrictions on the number of vessels allowed to pass cut from 30 to just 22 per day recently. In normal conditions around 36-38 vessels use the shipping route every day.
Large queues are continuing to form at both entrances, with over 100 ships regularly waiting to use the waterway. During the past week, both CMA CGM and MSC have announced ‘Panama Adjustment Factor’ surcharges which range from $150 to $300 per TEU.
A delayed rainy season has hindered the situation further, leading the Panama Canal Authority (ACP) to suggest passages will be reduced to just 18 per day by February.
The extreme conditions have also led the ACP into holding auctions for shipowners to jump the queue. It has been widely reported that a fee of almost $4 million, in addition to the usual toll fee, was recently paid for one ship to get to the front of the line.
The canal is operated by a water supply from two lakes that have witnessed extremely low water levels this year. A lack of rainfall from January to April brought the lowest levels in two decades and the region has not since recovered. Last month was the driest period since records began 73 years ago.
Delays of up to 15 days for Panama Canal crossings are notably impacting North and Latin American West Coast services to and from Europe and the UK.