Further Vessel Restrictions and Potential Delays at the Panama Canal

On May 3rd, the Panama Canal Authority released its 6th draft restriction of 2019, a result of the country’s ongoing and severe drought conditions. Effective May 28th, vessels traveling through the famous canal will be restricted to a maximum draft of 13.1 meters (43 feet).

Authorities lowered the current restrictions on the waterway by an additional 30 cm due to concerns stemming from low water levels in the canal. Although Panama’s dry season has occasionally caused problems in the past, drought-related issues are much more impactful in the era of mega vessels.

Shippers should be prepared for potential delays at the canal in the near term.  Shippers of heavier cargo such as steel, flooring, tile, etc. may find it more difficult to make bookings at origin. For 2019 year-to-date, modest vessel utilization ratios have kept vessel weights low enough to pass through the canal. As volumes pick up this summer, we could be facing severe service disruptions and cargo delays.

Officials hope relief accompanies the impending rainy season expected to last from May through December in Panama.

Shapiro will continue to monitor the situation and provide updates as they become available.