Panama Canal Draft Restrictions Continue Amid El Niño Concerns

Ocean carriers are raising surcharges as the Panama Canal continues to take precautionary measures in case of a drought. The Panama Canal has been implementing water-saving measures to prepare for potential weather impacts from the looming El Niño climate pattern expected in the second half of 2026.

A drought hit the canal in 2023 and 2024 leading to longer transit times and higher transit fees. In its latest draft adjustment, the major waterway announced that the maximum authorized draft for vessels transiting the Neopanamax locks will be 48 feet, effective August 26. The next draft is set at 47.5 feet, effective September 3.

The Panama Canal had already implemented two separate draft measures earlier this summer. According to a press release from the Panama Canal, these reductions represent the fourth and fifth draft adjustments announced by the Panama Canal Authority. The measures are the result of operational planning informed by lessons learned during the 2023-2024 period, as well as hydrological analyses and historical data that support the canal’s operational decision-making process.

Due to the ongoing draft restriction, ocean carriers have recently updated their previous Panama Canal surcharges. Here are the latest fees from several major carriers:

| Carrier | Surcharge per TEU | Effective Date | Additional Charges | | --- | --- | --- | --- | | Mediterranean Shipping Company (MSC) | $149 per TEU | September 12 | $297 per forty-foot equivalent unit, $376 per 45-foot container | | CMA CGM | $500 per TEU | September 10 | | | Hapag-Lloyd | $130 per TEU | August 15 | | | Ocean Network Express (ONE) | $150 per TEU | August 10 | |

The surcharges apply to various cargo types and routes, including shipments between Southeast Asia, China, Korea, and Japan to the U.S. East Coast and U.S. Gulf Coast, as well as cargo from the Far East to the U.S. East and Gulf Coast via the Panama Canal.

The ongoing draft restrictions and increased fees are a result of the Panama Canal's efforts to prepare for potential weather impacts from the looming El Niño climate pattern. Ocean carriers are passing on the costs to their customers, and it remains to be seen how these changes will affect the global shipping industry.

## Impact on the Shipping Industry

The draft restrictions and increased fees are likely to have a significant impact on the shipping industry, particularly for carriers that rely on the Panama Canal as a key route. The increased costs may lead to higher prices for consumers and potentially affect the competitiveness of carriers that use the canal.

## Preparing for El Niño

The Panama Canal's efforts to prepare for potential weather impacts from the looming El Niño climate pattern are a proactive measure to mitigate the effects of drought and other weather-related issues. The canal's water-saving measures and draft restrictions are designed to ensure the continued safe and efficient operation of the waterway.

## Conclusion

The ongoing draft restrictions and increased fees at the Panama Canal are a result of the canal's efforts to prepare for potential weather impacts from the looming El Niño climate pattern. Ocean carriers are passing on the costs to their customers, and it remains to be seen how these changes will affect the global shipping industry.