Panama Canal Surcharge: What's latest from carriers and how freight forwarders can plan ahead?

In a recent development impacting global shipping dynamics, the Panama Canal Authority has taken measures to address the ongoing challenges posed by low water levels. During Q2 2023, the Authority decided to reduce the draft from 14.94 to 13.41, citing a lack of precipitation in the region despite months of water conservation efforts.

As a consequence of these measures, there are now further restrictions on the number of vessels permitted to cross the canal. This comes in the wake of increased Canal Tariffs implemented earlier this year, directly affecting overall operations costs.

Here is the snapshot of the surcharges announced by the ocean carriers so far:

Impact on Forwarders working with Panama routes and what planning is needed in future?

• According to the Panama Canal Authority, the average daily queue for non-booked vessels has significantly increased, reaching 9.3 days for northbound vessels and 10.5 days for southbound vessels as of November 28, 2023.

• The reduction in daily transits to 18 a day from February may result in capacity dropping below 50% of the Neopanamax locks' design capacity.

• Maersk advises shippers to anticipate transit issues but assures that advanced planning, with transits scheduled between 30 and 14 days before arrival, could help mitigate potential delays.

• Forwarders should anticipate potential transit issues and plan accordingly, considering the extended waiting times for vessels atleast until Chinese New Year 2024.

• The ongoing challenges in the Panama Canal, including restrictions and protests, highlight the importance of proactive planning and exploring alternative routes for forwarders to minimize disruptions to their logistics operations.