Panama Canal to cut daily vessel transits due to El Niño

The Panama Canal Authority plans to reduce the number of daily vessel transits as water levels decline amid strengthening El Niño conditions. From September 15, daily capacity will be cut from 36 to 32 vessels, with initial restrictions starting as early as September 3, the Financial Times reports.

The decision comes amid a shortage of rainfall in the region. The Panama Canal’s locks require large amounts of freshwater to operate, meaning prolonged drought directly limits the number of vessels that can transit the waterway. El Niño is expected to strengthen significantly toward the end of 2026.

This will be only the second time in the canal’s 110-year history that the authority has been forced to reduce daily transits. To make more efficient use of available slots, vessels are expected to be allocated according to cargo type, with larger ships receiving priority. Carriers are also being encouraged to book transits in advance.

The restrictions come as the cost of transiting the Panama Canal is already at record levels. In August, the average price of auctioned slots was around $1.1 mln per transit. Problems on other major global trade routes, including geopolitical disruptions and adverse weather, are adding further pressure to shipping costs.

The Panama Canal handles more than 3% of global seaborne trade, meaning further capacity reductions could increase pressure on global logistics and raise freight costs, including for commodities and agricultural cargoes. The scale of the impact will depend on the duration of the drought and the intensity of El Niño toward the end of the year.

Tags: water levels, reduce, Эль-Ниньо, Panama Canal