Panama Canal: No New Plans to Restrict Transit
- Deputy Administrator Ilya Espino stated that the Panama Canal sees no need for further vessel transit restrictions until at least April when its authority will evaluate water levels at the end of the dry season.
- Of note, a severe drought last year forced the canal to reduce the number of vessels allowed to pass per day. In December, rains in the last quarter of the year allowed the waterway to suspend further restrictions that would have been applied in January.
- In recent months, attacks on ships at the Red Sea have prompted many vessel owners to take longer routes to and from Asia, increasing demand for transit through Panama. As such, Espino said "At least until April, we will maintain 24 authorized transits per day.
- If rains arrive in May as expected, the canal authorities plan to progressively increase daily slots, with the objective to return to about 36 vessels per day, which is a normal number during the rainy season. However, if rains are short of expectations, the authority could apply further restrictions to either daily passage or draft, a vessel's maximum depth.
- The need to preserve water levels at reservoirs feeding the canal has stopped it from absorbing incremental demand emerging from the Red Sea, where the attacks have hindered ships trying to pass through the Suez Canal, the world's busiest waterway, Espino said.
- Due to the transit restrictions, the Panama Canal Authority has forecast a reduction of up to $700Mn in toll revenues for the current fiscal year ending in September. In 2024, the canal might miss a total of 1,500 vessels that would pass through in normal conditions, Espino said.