How are Panama Canal tolls calculated? Does a Chinese cargo vessel pay nearly $4 million per transit? What’s the value of the cargo aboard such a vessel…

Now back to that counterintuitive question raised at the beginning: if the number of transiting vessels fell by 11%, why did revenue rise by 17%? The answer lies in the auction mechanism. Transit slots on the Panama Canal operate on a reservation system, but each day a small number of slots are set aside for on-site bidding. The highest bidder goes first. Under normal circumstances, this mechanism serves only as a supplementary measure. Yet once slot availability tightens, it transforms into a price amplifier. In June 2026, the weekly average auction price for Neo-Panamax locks surged to $910,000—five times higher year-on-year. What, exactly, does $910,000 buy? It buys a guaranteed transit date. For a large container ship, daily operating costs plus the time-value cost of its cargo often run into hundreds of thousands of dollars. Taking the Cape Horn detour adds over 10,000 kilometers and more than ten days; waiting uncertainly at the canal entrance for an available slot may prove even costlier. So when the daily slot allocation drops from 36 to 32, shipping companies stop asking, “Is this price expensive?”—and instead ask, “Is *not* buying this slot even more expensive?” That is how auction prices get pushed upward. Thus emerges a paradoxical combination: declining transit volume, rising revenue, and net profit growing even faster than revenue. The Panama Canal Authority calls this a “higher-yield transit structure.” IV. The “One-Foot Economics” Each one-foot reduction in draft forces a Neo-Panamax vessel to carry hundreds fewer containers. Auction pricing represents the explicit cost; draft restrictions constitute the implicit one. An industry adage holds that every one-foot reduction in the draft limit for Neo-Panamax locks forces a Neo-Panamax container ship to carry hundreds fewer containers. A drop from 50 feet to 47.5 feet equals 2.5 feet. These 2.5 feet won’t halt operations—but they will reduce cargo capacity per voyage. Shippers won’t cut shipments; instead, they’ll distribute the same volume across more vessels—increasing vessel calls and thereby intensifying demand for transit slots. This constitutes the second logic behind toll hikes: restrictions do not suppress demand—they fragment it further. There is also a layer of cost passed on to shippers. On Far East–U.S. East Coast and Gulf of Mexico routes, four major carriers—CMA CGM, MSC, Ocean Network Express (ONE), and Hapag-Lloyd—had already announced Panama Canal-related surcharges prior to the Authority’s latest draft restrictions. As of August 24, none of these four carriers had adjusted the magnitude of those surcharges. In other words, the extra charges levied by the Canal Authority ultimately land on shippers’ invoices. V. The Curve That Jumped from 25% to 81% From May to August 2026, watershed rainfall was 34% below the historical average; inflow was down 44%. If this were merely a single rainy season with below-average precipitation, the current restrictions would be just another cyclical event. But the Canal Authority is watching another indicator: the probability of an El Niño event. In April 2026, the forecast probability of a strong El Niño stood at 25%. By July, it had jumped to 81%. What does El Niño mean for Panama? It means the rainy season—when rain *should* fall—may remain dry, and that the upcoming dry season (January–April 2027) could begin with Gatun Lake at an even lower water level. The Authority has already issued a warning: this 2026–2027 El Niño episode could further reduce rainfall during the remainder of the rainy season. This is not the first time. During the 2023–2024 El Niño episode, the Canal’s draft limit dropped to 13.41 meters, and daily transits were reduced to just 22–26 vessels—triggering over a year of global shipping disruptions and supply chain volatility.

Starting June 1, carriers including Hapag-Lloyd and CMA CGM are imposing this surcharge—and limiting weight for smaller containers.

Currently, the Panama Canal is experiencing severe drought, repeatedly adjusting its draft restrictions. Container ships are forced to reduce cargo loads and pay higher fees, and freight costs for goods transiting the Canal are expected to rise further this summer. Analysts note that, on one hand, carriers are imposing surcharges; on the other, they are enforcing weight limits—causing some container ships’ cargo volume to shrink by up to 40%. Shippers may therefore shift to alternative routes. Carriers impose surcharges and adjust weight limits According to Bloomberg, starting May 24, the largest vessels must reduce their draft either by carrying less cargo or by lightening cargo weight—from 45 feet to 44.5 feet (13.56 meters)—and then again to 44 feet on May 30. This year, the Panama Canal Authority has adjusted draft restrictions for large vessels multiple times. Normal draft depth is typically 50 feet; during the 2019 drought, the restriction fell as low as 43 feet. In response to the Canal’s measures, at least four carriers have announced either weight restrictions or container surcharges of $300–$500 per TEU, effective June 1. As restrictions tighten further, additional operators are likely to follow suit. Specifically, on May 4, Hapag-Lloyd’s official website posted a notice stating that, due to Gatun Lake’s water level falling below normal, vessels transiting the Panama Canal face severe draft restrictions. Accordingly, effective June 1, 2023, a Panama Canal Charge (PCC) will be imposed on all cargo shipped from East Asia to North America. Details are as follows: Geographic scope: East Asia to North America (EC1, EC2, EC6) All container types: $500 per TEU From East Asia: Japan, South Korea, China, Taiwan, Hong Kong, Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, and the Philippines To North America: United States and Canada CMA CGM also announced its Panama Canal Adjustment Factor, effective June 1, with the following details: From: Asia (including China, Hong Kong, Taiwan, South Korea, and Japan) To: All U.S. East Coast, U.S. Gulf Coast, and Canadian discharge ports Cargo: Dry and refrigerated containers Amount: $300 per TEU Additionally, COSCO, CMA CGM, OOCL, APL, Evergreen, and MSC have imposed weight restrictions of 6–10 metric tons per TEU (including tare weight) for U.S. East Coast services—varying slightly by port. What are the implications? Stretching over 80 kilometers, the Panama Canal links the Pacific and Atlantic Oceans. Since its opening in 1914, it has remained a vital maritime artery for global trade.

Hapag-Lloyd to Implement Panama Canal Surcharge from Oceania to US East Coast, Latin America

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Hapag-Lloyd will implement a $155/TEU surcharge on cargo from Oceania to the US East Coast and Latin America effective October 17 due to Panama Canal restrictions. The charge responds to El Niño-induced water level drops reducing canal capacity and transit slots.

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