News / Maintenance work and weather threatens to boost Panama Canal congestion

Photo: © Yanik Chauvin

There may be claims that the Panama Canal is operating “normally”, but anxiety is increasing that forthcoming maintenance will exacerbate congestion that has built since the US and Israel launched their assault on Iran – and El Niño is on the horizon.

Average waiting time at the canal has surged 60% since the start of the conflict and is now around 48 hours, according to Scandinavian investment bank SEB, which warned that congestion was “already building” and would worsen with works set to begin on 9 June and last until the 17th.

The maintenance on the dry chamber of the East Lane of Gatun Locks will result in the 26 available slots in the panamax locks reducing to 16 during the period.

Amid the warnings, carriers and the Panama Canal Authority have sought to downplay the present congestion, pointing out that the waterway is continuing to handle its usual average of 36 to 38 vessels a day, while Maersk noted that the port of Manzanillo was operating normally.

However, the claims are seemingly doing nothing to downplay concern over congestion, generated in part by ships carrying alternative Asian energy supplies – access to Middle Eastern suppliers being cut off by the effective closure of the Strait of Hormuz.

Alongside bringing these ships through the canal, this shift in energy supply has spiked the prices being paid for auctioned slots, with reports that $4m was paid for a neopanamax auction slot, 29 times the average and 10 times what has become typical since the onset of the war.

If that was not enough, growing weather risks are upping the ante, with the US National Oceanic and Atmospheric Administration estimating that El Niño has an 82% probability of returning before July – 98% odds on a return during the final quarter.

Should it strike, the expectation is that the region will experience less rainfall, reducing water levels in the Gatun Lake, which would necessitate the imposition of restrictions on transits.