Wait 20 days! 150 ships "immobilized"! The Panama Canal is experiencing the worst dry water in its history!

The Panama Canal, the world's shipping artery, is suffering its worst drought since records began in 1950.

In addition to causing a significant reduction in Panama Canal capacity, this has also led to increasing delays for container ships passing through the Panama Canal!

In the first week of August, the average delay time for each ship in the Panama Canal has been as high as 15 to 19 days!

There is a backlog of 150 ships

The Panama Canal is suffering from an unprecedented drought since records began in 1950, resulting in a significant reduction in capacity.

In response, the Panama Canal Authority (PCA) introduced water-saving measures in late July, temporarily reducing the number of Panamax ships booked between August 8 and August 21 from 23 to 14 per day, causing the blockage.

It is understood that there are 129 ships in the panamax lock backlog and 21 ships in the neopanamax lock backlog, causing delays of 17 and 20 days respectively for ships from the Pacific to the Atlantic region, and 16 and 19 days respectively for ships on the return voyage.

In July, the PCA imposed additional, more stringent lower water limits, requiring ships to reduce their deadweight by 40 percent, which had an impact on those ships that were in transit.

It is reported that recently, a large container ship named Ever Max, owned by Evergreen Marine, had to reduce the load of 1,400 containers before it could pass through the canal.

The unloaded containers will then be transported by rail to Cologne, where they will be reloaded and then shipped to Savannah. It is foreseeable that the additional costs incurred will not be low.

Changes in operating conditions are causing delays for ships in all segments, with ship tracking data showing long lines of ships waiting to pass on both sides of the Panama Canal!

"The Panama Canal delay is a reminder of the urgent need to address climate change. "Shipping is one of the most vulnerable sectors to climate change and we need to take action to reduce emissions and mitigate risks." Thomas Zaidman, managing director of dry bulk shipowner and operator Sagitta Marine, commented.

While rain has returned to Panama, authorities are unlikely to make any upward revisions to the draft or transit numbers in the short term, as this year's El Nino weather phenomenon brings drier weather later in the year.

In fact, the Canal Authority has acknowledged that it could lose up to $200 million in revenue next year if the situation persists.

Congestion affects the consolidation market:

A severe drought has forced the Panama Canal to introduce shipping restrictions that don't just mean container ships that want to pass through the canal have to load less and pay higher fees.

The cost of shipping goods through the Panama Canal is expected to rise further this summer, and cargo may face delays.

According to Nathan Strang, the canal draft restriction will significantly reduce the available space on most shipping companies' container ships, meaning that more ships will be needed to carry the same amount of cargo, which could increase the queuing time for ships waiting to pass through.

Strang said some shippers will have to split heavier cargoes into two containers instead of one, and ships carrying heavier cargoes will be more affected.

The measures could cost importers and retailers an additional $1,500 per container passing through the Panama Canal.

Due to the limited number of ships transiting the canal each day, the Canal Authority is advising shipowners to apply in advance for time slots through the canal, a move that means they will soon have to participate in "auctions" for transit slots that consistently command prices of more than $350,000, according to a report.

In addition, some shipping companies began to impose a Panama Canal surcharge.

Cma CGM announced that since June 1 and September 1, respectively, the Panama Canal surcharge PCC has been continuously increased, with an increase of $300 / box each time.

In May, Hapag-Lloyd issued a notice saying that lower than normal water levels in Gatun Lake were causing severe draft restrictions for ships passing through the Panama Canal.

As a result, effective June 1, 2023, a Panama Canal surcharge PCC of $500 per box will be imposed on all shipments from East Asia to North America.

A severe drought has forced the Panama Canal to introduce shipping restrictions that don't just mean container ships that want to pass through the canal have to load less and pay higher fees.

The cost of shipping goods through the Panama Canal is expected to rise further this summer, and cargo may face delays.

I hope the above situation can be resolved as soon as possible.

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See you ~