Shipping capacity through the Panama Canal is being restricted as authorities prepare for the potential impact of a strengthening El Niño weather pattern.

The Panama Canal Authority has reduced the number of permitted daily crossings from 36 to 34 and suspended auctions for priority transit slots. The measures took effect on 25 July, with further reductions possible during August if conditions deteriorate.

El Niño raises Pacific Ocean temperatures and is frequently linked to prolonged drought across Central America. Current forecasts indicate a high probability of a strong or very strong event developing towards the end of 2026 and continuing into early 2027.

Several major ocean carriers have already introduced surcharges of US$100 or more per TEU for cargo routed through the canal, anticipating higher transit and operating costs as available capacity tightens.

The situation follows the severe drought of 2023, when falling water levels in Gatun Lake forced authorities to progressively reduce vessel drafts and daily crossings. At the height of the disruption, capacity fell to around 21 vessels per day from an average of 38-39 during normal conditions, creating lengthy queues, unreliable schedules and exceptionally high prices for priority passages.

Connecting the Atlantic and Pacific Oceans, the Panama Canal is a critical route for trade between Asia, the Americas and Europe. It also overlaps with the Suez Canal as an alternative routing option for some Asia–US East Coast and wider international services. When disruption affects either waterway, carriers may redirect vessels towards the other, increasing pressure on capacity, schedules and freight rates across multiple trade lanes.

Unique Forwarding is monitoring developments closely and will keep customers informed of any significant developments.