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Panama Canal Disruption

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  • Panama Canal Disruption

    • Our vessel type and size will not be able to transit the canal in the foreseeable future

    Lars Bonnesen, Managing Director, United Heavy Lift

    Hamburg (November 28, 2023) – We would like to provide you with an update on the current developments at the Panama Canal and their impact on shipping. The Panama Canal Authority announced in Advisory to Shipping No. A-48-2023 that they need to reduce the number of ships that pass through the canal each day.  October was the driest month in 73 years due to El Niño, affecting the canal’s water supply.

    Rainfall was 41% below normal. Despite efforts to conserve water since the beginning of the dry season in 2023, the water level of Lake Gatun is low. To deal with this, they need to reduce the number of ships that pass through to reduce the amount of water that goes into the ocean.

    Unfortunately, the Panama Canal authorities have just announced that the situation is not expected to improve until after the dry season of December-April. Currently, they are only allowing top customers to transit the canal to maintain water levels. The auctions for transit slots are currently at exorbitant levels. Our vessel type and size will not be able to transit the canal in the foreseeable future. Based on current information from the canal authorities, we estimate that the earliest our vessel type and size will be able to transit the canal will be May-June 2024.

    Obviously, this disruption will have a huge impact on shipping in general, as voyages will be much longer, and voyages will be diverted to either the Cape of Good Hope, the Suez Canal, or Cape Horn – causing freight rates to increase. More details can be found on the Panama Canal Authority website. We’ll keep you posted on any new developments.

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