It’s reported that, because of the recent drought, the traffic volume in Panama Canal (the second busiest canal globally) has been reduced by 29%.
The Panama Canal is about 28 meters higher than sea level, so with the help of specially-designed pools the vessels are raised and lowered in the canal. The lack of significant water in the pools caused restrictions in the transits. The number of transits dropped by about 10,000 in the Fiscal Year (FY) of 2024 (October 1, 2023 to September 30, 2024) when compared with FY23. The daily number of transits has dropped from 36 to 22. Another 60% of the overall reduction was attributed to actions taken by canal operators, who were cutting transits per day from what management estimates will average 36 for fiscal year-end FY23 (hundreds had been westbound and more than half east), in “normal” conditions.
Throughout this period, all sectors of the shipping industry, with the exception of container vessels, faced considerable losses.
The total discharges of large neo-Panamax vessels saw a decline of 21%. However, this specific category of vessels displayed some growth—container ships of this type increased by a mere 2% compared to the previous year. In the case of VLGCs, there was a significant regression of 17%, while the LNG carrier segment fared even worse, experiencing a staggering reduction of 66%.
Carrier challenges emerged during this timeframe, including the heightened loads carried by large vessels utilizing neo-Panamax locks, which ensured safe voyages.
The container ship, VLGC and LNG carrier segments increased their dominance of traffic in the neo-Panamax locks to 95% in FY2024 compared to 84% in FY2023. Nonetheless, attention towards other segments, including dry bulk and chemical tankers, diminished significantly, with declines of -46% and -17%, respectively.
The Panama Canal Authority announced that the new Long-Term Quota Allocation methodology will be implemented for all market segments except liquefied natural gas (LNG) and liquefied petroleum gas (LPG) as of October 1st.
In a statement made by the Panama Canal Authority, it was stated that this method, which is part of the reservation system, was developed to increase transit security and flexibility.
