The Panama Canal is cutting transit: the passage price is already record-breaking

The Panama Canal will reduce the number of ships that can daily pass between the Atlantic and Pacific Oceans starting in September. The reason is a rainfall deficit amid the intensifying El Niño phenomenon.

From September 15, the canal will allow 32 vessels per day instead of the current 36. The first phase of restrictions will begin as early as September 3, reports Financial Times, citing the Panama Canal Authority.

The canal accounts for more than 3% of global maritime trade and requires significant volumes of fresh water to operate its locks. Due to below-normal rainfall, the authority already began restricting vessel draft this summer, forcing some carriers to carry less cargo.

The problem is exacerbated by El Niño. This year's phenomenon could become one of the most intense on record and cause severe drought in a number of regions. The Panama Canal already experienced a historic water shortage in 2023-2024, when the authority was first forced to significantly reduce the number of available transit slots.

Along with capacity cuts, from September 3 the bidding process for transit slots will change. They will be divided into four categories depending on cargo type, and during passage through the larger Neopanamax locks, preference will be given to vessels with greater capacity. The authority recommends carriers book passages in advance.

The limited capacity has already sharply increased the cost of access to the canal. In August, the average auction passage price reached about $1.1 million - more than 16 times higher than in the same period last year. Additional demand arose after the closure of the Strait of Hormuz due to the US-Iran war, which complicated global shipping.

For Panama, the canal is also one of the main sources of budget revenue. In the 2025 fiscal year, it generated nearly $3 billion for the state.