Waterways the world over are contending with all manner of chaos, especially the Panama Canal where congestion is worsening as a consequence of the war in the Middle East and low-water restrictions loom.
Sources told The Loadstar some 112 vessels were awaiting entrance to the canal, with those sending containerised freight being warned they face further delays as oil transits increase.
One source said the congestion was building to a point where delays of “up to 10 days” could be expected on eastbound transits, and the situation for US west coast transits could soon deteriorate.
The congestion has been linked to the number of energy vessels looking to avoid Middle Eastern gateways, the situation in the Strait of Hormuz still unresolved and the US Gulf Coast considered an alternative loading port.
A forwarder told The Loadstar the congestion was bringing indirect effects right across the region, with the congestion disrupting vessel rotations, reducing schedule reliability, and creating pressure on equipment availability.
“The main concern for us is any knock-on effect the congestion has on global shipping networks. If waiting times remain high, carriers may adjust schedules or capacity, and this can eventually put additional pressure on freight rates,” the forwarder added.
For those unwilling to wait, the Panama Canal authority (ACP) makes three to five ‘queue-jump slots’ available for auction each day, having noted that pre-Iran war, those slots were reaching prices as high as $135,000 to $140,000.
But by March, that figure was just shy of three-times higher, at an average of $385,000 – reports even claiming carriers broke a three-year-old record twice in one week amid the desperation to escape the worsening congestion.
One carrier purportedly coughed up in excess of $4.6m so that its empty oil tanker could jump the queue, surpassing a $4m price tag paid only a few days earlier.
All of which is compounding the nervousness around Panama Canal trade flows going into the El Niño season, the annual Q4 weather event forecasters claim this year has an 81% chance of being “very strong”, with conditions likely to persist into early spring.
With stronger El Niños linked to lower water levels, the canal authority has plans to cut the maximum draught for neo-panamax transits: first to 48ft, on 26 August; and then to 47.5ft on 3 September – part of a preparation cycle that has been running since December.
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