The Panama Canal Authority (ACP) will cut daily booking slots in September, tightening transit capacity further and compounding congestion that has pushed Neopanamax auction costs to multi-year highs and southbound waiting times to 18 days.
Under changes effective from 21 August for booking dates beginning on 4 September, the ACP will offer nine daily slots through the larger Neopanamax locks and 25 through the smaller Panamax locks. The Panamax allocation will fall further to 23 slots for booking dates from 15 September.
Only one Neopanamax slot will be offered during Booking Period 2, covering the eight to 14 days before transit. Ten slots will be available to Super vessels using the Panamax locks during the same booking period from 4 September, falling to eight from 15 September.
The ACP will also divide auction access into four vessel groups. LNG and LPG carriers will be in Group 1; dry bulk and general cargo vessels in Group 2; container ships and vehicle carriers in Group 3; and chemical, crude and product tankers in Group 4.
The temporary reductions follow sharply below-average rainfall and inflows into the canal watershed. Rainfall was 34pc below the historical average in May-August and inflows were 44pc below average, the ACP said. The authority also warned that a potentially severe 2026-27 El Nino could reduce precipitation and runoff further ahead of next year's dry season.
Reduced slot availability is likely to increase competition for transits, potentially raising freight costs or prompting vessels to divert around the Cape of Good Hope. The ACP warned that fewer daily transits may increase waits for vessels arriving without reservations.
Argus assessed the Neopanamax auction price at a lump sum of $2.35mn on 20 August, its highest in recent years. One shipowner recently paid $4.2mn for a northbound Neopanamax slot at the end of August.
Waiting times for southbound Neopanamax transits have climbed to 18 days, the longest since 21 December 2023.
The ACP has also postponed two planned reductions to the maximum vessel draft permitted through the Neopanamax locks. The restrictions were announced in response to falling water levels in Gatun Lake, the freshwater lake that supplies the canal.
The reduction in the maximum draft to 48ft (14.63m), previously scheduled for 26 August, has been postponed until 2 September. A further cut to 47.5ft (14.48m), originally due on 3 September, has been delayed until 1 October.
The draft restrictions should have little direct effect on very large gas carriers (VLGCs), which typically draft 36-40ft (11-12m). Reduced slot availability presents the greater concern for owners of these vessels.
Severe congestion at the canal is already diverting more US LPG into northwest Europe, raising the risk of oversupply. Flows to the region could climb to a nine-month high in August, with imports potentially running as much as one-third above the average of the previous five months, according to Kpler data.
Higher transit costs are encouraging some Asia-bound cargoes to take the longer route around the Cape of Good Hope. Before committing to the longer voyage, sellers can instead place volumes in Europe, the nearest major demand centre and the Atlantic basin's largest alternative outlet.
The disruption risks repeating conditions seen earlier this year, when Panama Canal congestion made it more difficult to move US LPG to Asia, forcing US sellers to seek alternative outlets and increasing supply pressure in Europe.
