Panama Canal Restrictions Announced

2024-03-04T16:33:43-05:00May 24th, 2023|

Due to a severe drought currently impacting the Panama Canal, vessels will be forced to adapt to the low water levels by restricting their drafts.

Ships will now be faced with decisions carrying less cargo on board during a single voyage, cutting the weight, or splitting cargo across multiple vessels. As a result of these drastic changes, major ocean carriers are planning to introduce additional costs/fees to compensate for the shortage of goods.

The water level of the Canal is projecting a drastic decline from approximately 80 feet as of May 19, to a historically low 78 feet by July, according to one article. As a result, the official Panama Canal draft restriction of 44.5 feet will go into effect on Wednesday, May 24, and another decrease to 44 feet is expected to follow next week on May 29. 

“At least four ocean carriers have announced weight limits or imposed container fees between $300 and $500 per box effective June 1, 2023 in response to the canal’s measures. More carriers are likely to follow suit as restrictions ramp up.” For example, Hapag-Lloyd announced that shippers from East Asia to North America will be expected to pay a surcharge on all cargo.

Fortunately, There are alternative routes that carriers may consider to avoid these challenges. The Suez Canal, as well as California ports, are just a few alternatives to mitigate the ongoing predicament.

We are committed to keeping our customers informed of the situation while updates continue to surface. Please reach out if you have any concerns or questions.


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