Panama Canal Reduces Booking Slots Over El Niño Concerns

The Panama Canal Authority is reducing the number of daily transit bookings as concerns grow that an emerging El Niño weather pattern could limit water supplies and affect operations at one of the world’s busiest shipping routes.

According to shipping agency Norton Lilly, auctions for close-in “Period 3” transit slots for regular and super Panamax vessels will be suspended from July 25 until further notice.

The change will lower the canal’s daily booking capacity from 36 vessels to 34. However, auctions for neopanamax transits will continue, and extraordinary auctions will still be held when scheduled vessels cancel or bring forward their transits.

Period 3 booking slots, available between 96 and 48 hours before transit, are particularly important for vessels without advance reservations or those operating on tight schedules. Norton Lilly warned that ships relying on these bookings may find it more difficult to secure passage and should allow greater flexibility when planning voyages.

As a result, demand is expected to increase for Period 1 slots, which can be reserved up to a year in advance, and Period 2 slots, which become available 21 days before transit.

The reduction comes at a time of rising demand for Panama Canal transits due to disruptions affecting other major shipping routes. Traffic through the Strait of Hormuz has slowed following attacks on commercial vessels, while ongoing Houthi threats continue to discourage some ships from using the Red Sea and Bab el-Mandeb Strait.

Strong U.S. LNG export volumes have also increased demand for canal transits. Earlier this year, auction prices for neopanamax slots reportedly exceeded $4 million as operators competed for limited availability.

The latest restrictions follow a reduction in the canal’s maximum allowable draft, which took effect on July 1.

During the severe 2023-2024 drought, the Panama Canal Authority implemented similar measures, including reducing daily vessel transits, imposing draft restrictions, using double lockages and introducing water conservation initiatives.

Despite the latest changes, vessel queues remain relatively short. As of July 21, there were 16 unbooked ships waiting to transit the canal, with average delays over the previous 28 days standing at 2.4 days for northbound vessels and four days for southbound traffic.