Intermodal Advisory: Key Updates on the Panama Canal Drought – Updated 31-JULY-23

May 19, 2023 | LinkedIn

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UPDATES AS OF JULY 30, 2023:

 

Additional Measures to Mitigate the Extended Dry Season and Reduction in Precipitation in the Canal Watershed

 

Adjustment of Daily Transit Capacity

The Panama Canal Authority (ACP) has announced further measures to mitigate the effects of the extended dry season in the Canal watershed, despite the onset of the rainy season. Effective July 30, 2023, the daily transit capacity will be adjusted to an average of 32 vessels per day, typically distributed between the Panamax and Neopanamax locks as follows: 10 vessels in the Neopanamax locks and 22 vessels in the Panamax locks. The ACP may further adjust the daily transit capacity as necessary based on factors such as the level of Gatun Lake, weather forecasts, and vessel mix.

 

Priority for Full Container Vessels

During the 2nd and 3rd Booking Period competition for the Panamax locks, full container vessels will be given priority over other vessel types in the assignment of slots. Any remaining slots will be assigned based on customer ranking. This modification will take effect from Tuesday, August 1, 2023, for Booking Period 3, and from Saturday, August 19, 2023, for Booking Period 2. Applications for reserved slots under this new allocation procedure will be accepted from 0900 hours on Saturday, July 29, 2023.

 

Increased Waiting Times

The ACP has warned that a reduction in the number of daily transits for an extended period will inevitably increase the waiting time for some vessels, particularly those who do not secure a reservation. To minimize the possibility of extensive delays, customers are strongly encouraged to use the Transit Reservation System.

 

 

The ACP may implement additional measures and establish further procedures to ensure the safe and efficient operation of the Canal.

 

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UPDATES AS OF JULY 2, 2023:

 

Continuation of Draft Restrictions Due to Drought

The Panama Canal Authority (ACP) has announced that due to a drought causing water levels at its main lake to drop to a four-year low, restrictions on shippers will likely remain in place throughout the year. The ACP aims to maintain draft restrictions, which limit how deep a ship can sit in the water, at no lower than 44 feet (13.4 meters) for large, Neopanamax ships.

 

Impact on Vessel Transits

To maintain a draft of 44 feet, the ACP is limiting the number of ships that cross the canal each day. Currently, approximately 30-31 ships per day are allowed to transit the waterway, down from 36-37 during optimal conditions. This measure is in place to prevent water levels from falling further at Lake Gatun, which is projected to drop to 79.5 feet by August.

 

Prioritization and Wait Times

The draft restrictions have resulted in longer wait times for ships crossing the canal. The ACP will prioritize ships that have booked transit slots, handling unbooked ships on a standby basis.

 

Future Adjustments

The ACP has stated that should the canal receive more rainfall than expected, it could increase the draft. Any changes will be announced with enough time for shippers to plan and for the ACP to schedule.

 

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UPDATES AS OF JUNE 22, 2023:

Postponement of the Maximum Authorized Draft for Vessels Transiting the Panama Canal

 

“Due to favorable weather conditions experienced during the past several days in the Canal watershed, The Panama Canal Authority announces the postponement of the maximum authorized drafts of 13.26 m (43.5 feet) TFW for Neopanamax locks, and 11.89 m (39.0 feet) TFW in the panamax locks, scheduled to become effective on June 25, 2023 and July 9, 2023 respectively, as announced in Advisory to Shipping A26-2023.

Therefore, the maximum authorized draft of 13.41 m (44.0 feet) TFW will remain in effect in the Neopanamax locks, and the maximum authorized draft of 12.04 m (39.5 feet) TFW will remain in effect in the panamax locks until further notice.

The ACP will continue to monitor the level of Gatun Lake and announce future draft adjustments in a timely manner.”

 

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UPDATES AS OF JUNE 2, 2023:

 

The Panama Canal Authority (ACP) has provided new updates regarding the draft restrictions in the Neopanamax Locks due to recent rainfall. The maximum authorized draft of 13.41 m (44.0 feet) TFW, originally scheduled to become effective on May 30, 2023, has been postponed until June 13, 2023. Consequently, the current maximum authorized draft of 13.56 m (44.5 feet) TFW will remain in effect until June 12, 2023.

 

Upcoming Restrictions:

  • Effective June 13, 2023: The maximum authorized draft will be 13.41 m (44.0 feet) TFW.
  • Effective June 25, 2023: The maximum authorized draft will be further reduced to 13.26 m (43.5 feet) TFW.

 

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UPDATES AS OF MAY 22, 2023:

 

Recent Update:

The Panama Canal Authority (ACP) has implemented further draft restrictions due to the persistent drought affecting the canal. The latest measures, effective May 24th, include a reduction in the maximum authorized draft for Neopanamax vessels to 44.6 ft (13.56 m), down from 45.1 ft (13.72 m). This will impact large container ships carrying 6,000 TEUs or more, potentially resulting in reduced cargo capacity of up to 40%.

 

Upcoming Update:

Starting May 29th, the ACP will institute another round of draft restrictions, lowering the maximum authorized draft for Neopanamax vessels to 43.9 ft (13.41 m). These measures aim to mitigate the impact of the ongoing drought on shipping capacity.

 

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OVERVIEW

Due to falling water levels caused by drought conditions, the Panama Canal has imposed draft restrictions on ships passing through the trade route. This means vessels must comply with reduced maximum depths, impacting cargo capacity.

 

IMPORTANCE OF THE PANAMA CANAL

Approximately 6% of global maritime trade relies on the Panama Canal. Last year, nearly 15,000 vessels carrying 520 million tons of cargo transited the canal.

It plays a vital role in connecting the Atlantic and Pacific Oceans.

 

WHY RAINFALL MATTERS

Rainfall is crucial for maintaining water levels in the canal. Freshwater from Alajuela and Gatun lakes is used to lift vessels. Adequate rainfall ensures the smooth operation of the locks, facilitating the passage of ships between the Atlantic and Pacific Oceans. Each ship passage requires approximately 200 million liters of fresh water.

 

CURRENT SITUATION AND IMPACTS – SEE UPDATE ABOVE FOR THE MOST CURRENT RESTRICTIONS

The Panama Canal Authority (ACP) has begun imposing draft restrictions on container ships transiting the canal. The latest restriction from May 12th, 2023, reduced the maximum authorized draft down to 45.1 ft (normally 50 ft).

This reduction in draft limit will impact shipping capacity and may result in adjustments to cargo volumes.

 

LONG-TERM CONCERNS AND SOLUTIONS

Water shortage and climate change pose long-term threats to the canal. Finding new water sources is essential for its sustainability. The Panama Canal Authority (ACP) is actively working on a project to increase the capacity of Gatun Lake, which is expected to provide a more sustainable water supply for canal operations in the future.

 

HOW TO PREPARE

  • Be prepared for potential delays in shipping schedules.
  • Consider alternative transportation modes or routing.
  • Plan ahead and allow for additional lead time in your logistics operations.
  • Stay in close communication with us for updates and guidance on the latest developments and alternative solutions.

Contact us to discuss shipping options and find the best strategies for your specific needs.

 

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WE’RE HERE FOR YOU!

✔️ Expert guidance: Personalized support to navigate the Panama Canal drought’s impact.
✔️ Alternative solutions: Efficient logistics options to minimize disruptions.
✔️ Reliable support: Count on us as your trusted partner to find solutions that optimize your supply chain.


Contact us today to discuss your shipping needs and let us help you overcome the challenges of the Panama Canal drought.

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