Panama Canal to Ease Daily Restrictions in January

Glenn Taylor
·4 min read

Some respite may be coming to the Panama Canal congestion that has escalated since the summer, in which the waterway has endured its second-driest year on record.

The Panama Canal Authority (ACP) announced Friday it will increase the number of ships it accepts each day to 24 starting in January 2024.

More from Sourcing Journal

The number of daily reservation slots available was initially expected to drop to 18 by February 2024, down from the current 22 vessels that can be booked per day.

The new booking total amounts to seven slots at the Neopanamax locks, which allow vessels with a maximum length of 1,215 feet and a 44-foot draft, and 17 at the Panamax locks, which enable passage of ships maxing out at 966 feet with a 39.5-foot draft.

In a shipping advisory, the ACP said it is adjusting the number of daily reservations that may be awarded to each customer to provide “a more equitable and fair distribution of slots.”

Applications to book under this new slot distribution began being accepted Sunday for vessels traveling Jan. 16. For ships looking to traverse the canal that day, the authority will allow one booking slot per customer per date, regardless of when the slot was booked, with some exceptions tied to auction and competition slots.

The ACP continues to urge customers to make reservations ahead of time to ship as scheduled.

According to the advisory, the changes were based on the current and projected levels of the rainfall-fed, artificial Lake Gatun, which provides the water to move ships through the Panama Canal’s lock system. Water levels at the lake were 81.4 feet Monday, still down nearly six feet from the five-year December average of 87.3 feet.

Under normal conditions, the waterway accepts 34 to 36 vessels that could be booked ahead of time before the first set of restrictions were implemented July 30.

In November, the ACP opened up an additional, temporary special auction slot for regular and “super” vessels that had been waiting for at least 10 days before and did not have a booking slot. The special auction may be offered “as deemed necessary,” the agency said.

Slow activity through the canal cut into the 5.7 percent increase of inbound containers into the top 10 U.S. ports in November, according to the McCown Report from container shipping expert John McCown, non-resident senior fellow at the Center for Maritime Strategy.

According to McCown, November saw a 29 percent decline in the number of 10,000-to-14,000 20-foot equivalent unit (TEU) container ships going through the canal. McCown’s data illustrated this had an impact on U.S. port volumes last month—West Coast gateways showed a 24.5 percent year-on-year growth in inbound container numbers, while East Coast and Gulf Coast ports saw an 8.5 percent decline.

But in December, congestion at the canal has lightened up for vessels, whether they booked ahead of time or not.

Overall, 63 vessels are in cue for transit in the Panama Canal as of Monday evening, with 32 ships having already booked a spot and 31 having not made a reservation yet. This is down significantly from the 110 vessels waiting to pass through as of Nov. 30.

The average time for non-booked vessels in the queue going northbound dropped from 15.2 days on Dec. 6 to 5.2 days on Monday.

However, the average southbound waiting time hasn’t seen as drastic of a jump given the passage isn’t dealing with the excess amount of cargo likely being transported from Asia to the U.S. East and Gulf Coasts. For trips going south, waiting time saw a slight increase from 7.8 days on Dec. 6 to 7.9 days on Monday.

The ACP’s water-saving measures appear to be helping with easing the congestion. The canal has incorporated cross-filling, a technique that sends water between the two lanes at the Panamax locks during transits and saves the equivalent amount of water used in six lockages each day.

Other measures include tandem lockages, in which two ships transiting at the same time can occupy one chamber, whenever the size of the vessels allows it.

By expanding booking slots for the first time since the summer, the waterway is bringing a sigh of relief to the wider shipping industry, which is increasingly diverting vessels away from the Red Sea amid a series of drone attacks over the past month from Houthi militants.

The Red Sea is the entry point to Egypt’s Suez Canal, which itself was a critical alternate trade route for businesses that wanted to reroute their shipments away from the Panama Canal when the daily booking and draft restrictions began being put in place.

Thus far, container shipping giants including Maersk, MSC and Hapag-Lloyd have rerouted their vessels away from the Suez Canal, instead opting to sail around southern Africa’s Cape of Good Hope to travel to Europe.