Why has the Panama Canal reduced its daily ship passage capacity, and what is the new limit as of September 15?

The Panama Canal has reduced its daily ship passage capacity due to a rare drought caused by El Niño, which led to a 34% shortfall in rainfall from May to August compared to historical averages. To ensure long-term navigability, the Panama Canal Authority cut the daily vessel limit from 38 to 34 starting September 3 (9 for Neopanamax locks and 25 for Panamax locks), and further reduced it to 32 starting September 15 (9 for Neopanamax and 23 for Panamax).

How are chemical and energy shippers adapting to the Panama Canal’s new auction-based slot allocation system introduced on September 3?

Starting September 3, the Canal’s daily auction slots are divided into four cargo-specific groups: (1) LNG and LPG vessels; (2) dry bulk carriers; (3) container ships, car carriers, and reefers; and (4) chemical tankers, crude oil tankers, and product tankers — meaning chemical and energy shippers now compete only within their designated group. In response, shippers are adopting strategies including cargo reduction (raising per-unit transport costs), switching to smaller vessels, scheduling off-peak transits (increasing delivery uncertainty), or using transshipment (e.g., transferring LPG from smaller Panamax ships to larger Neopanamax vessels on the Pacific side), despite added handling time and cost.

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