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Here’s some good news, finally, for ocean shipping companies.
The Panama Canal Authority (ACP) has decided to maintain its current vessel transit restrictions until at least April, thanks to a wetter-than-expected November and December, according to Reuters.
And if the rain gods are kind in May, they’re planning to ramp up daily slots from the 24 today to 36, which is the historical average.
- Right now, the canal allows vessels with a maximum draft of 44 feet, a regulation that allows ships to avoid reducing their cargo loads. This helps keep the transport of many goods in the profitable zone.
- While container ships are given priority for canal passage, the restrictions have impacted other categories, such as bulk carriers.
"At least until April, we will maintain 24 authorized transits per day,” Deputy Administrator Ilya Espino told Reuters. “If rainfall does not begin in May, we would evaluate again whether to cut transit by one or two vessels per day, or to reduce maximum vessel draft to 43 feet."
Why it matters: With the Red Sea facing its own set of challenges, the Panama Canal is even more in demand now. So the ACP's move to keep transits steady, instead of dropping to 18 as initially feared, will come as a big relief for shipping companies.
But despite this development… the ACP is bracing for a $700 million dip in toll revenues this fiscal year ending in September, with the canal expecting to miss about 1,500 vessels that would sail through in normal conditions, according to Espino.
