Panama Canal Delay Worries Grow Ahead of June Maintenance

Congestion at the Panama Canal is increasing as authorities prepare for maintenance work next month that is expected to temporarily reduce transit capacity, fueling new concerns over shipping delays and rising freight rates.

The Panama Canal Authority has announced dry chamber maintenance works on the east lane of the Gatun Locks from June 9 to 17. During this period, daily transit slots will be reduced to 16 vessels, with ships redirected through the west lane, resulting in longer passage times.

The maintenance comes at a difficult time for global shipping markets, which are already dealing with growing vessel queues on both sides of the canal. Much of the pressure has been linked to changing trade patterns caused by the ongoing Strait of Hormuz crisis.

Scandinavian investment bank SEB warned that congestion risks are rising quickly.

“Congestion at the Panama Canal is already building,” SEB stated, noting that average waiting times this month have reached 47.9 hours, roughly 60% higher than averages recorded before the conflict earlier in the year.

The bank added that the upcoming maintenance period could worsen delays further, potentially forcing some ships to either endure extended waiting times or reroute via the Cape of Good Hope at significantly higher cost.

“Both tighten effective VLGC supply,” SEB said, adding that conditions remain especially supportive for LPG freight markets, where US Gulf rates have already climbed to record levels near $185,000 per day.

Weather concerns are also adding to market uncertainty. The US National Oceanic and Atmospheric Administration has estimated an 82% likelihood of El Niño conditions returning between May and July, with up to a 37% chance of a severe event developing by the end of the year. Historically, El Niño reduces rainfall in Central America, lowering water levels in Gatun Lake, the canal’s primary freshwater source, and leading to transit restrictions.

Despite the concerns, the Panama Canal Authority has attempted to reassure the market that a repeat of the severe drought disruption seen earlier this decade is not expected. Officials said there are currently no plans to impose vessel restrictions for the remainder of 2026, adding that water conservation measures introduced last year have helped keep Gatun Lake at relatively stable historical levels.

The authority also emphasized that the canal is still handling approximately 38 vessels per day despite increasing demand.