Panama Canal Slowly Returning to Normal Operations but experts say it is far from pre-restrictions level; still, a limited relief

Starting Thursday, 16 May, the Panama Canal Authority has increased the daily number of ships allowed to transit the waterway from 24 to 31.

Peter Sand, Chief Analyst at the Oslo-based firm Xeneta, says the increase will provide limited relief for container shipping services, since the increase corresponds additional slots in the smaller panamax locks. However, a more meaningful change is anticipated on June 1, with an additional transit slot for larger Neopanamax ships (including containerships), which will raise the daily total to 32. Meanwhile, authorities also plan to increase the draft limits for Neopanamax ships from 44 feet to 45 feet on June 15, bringing it closer to the normal limit of 50 feet.

The disruption caused by the water shortage in the Panama Canal has had a significant impact on scheduling reliability and spot rates.

As the Panama Canal slowly transitions towards normal operations, Sand says businesses need to be prepared for a slow recovery that is dependent on unpredictable factors like rainfall. While hopes for a return to ‘normal’ are high, the reality may be a different.

“Xeneta has long-held the position that the impact of drought in the Panama Canal will be felt for years rather than months,” Sand says.