The ongoing drought at theĀ Panama CanalĀ is exacerbating, leading to further tightening of vessel transit restrictions. Daily ship passages through the canal continue to decrease, coupled with an earlier hike in canal transit fees this year, significantly raising operational costs for shipping companies.
In response to these challenges, bothĀ Mediterranean Shipping Company (MSC)Ā andĀ CMA CGMĀ have recently announced the implementation of a Panama Canal Surcharge to alleviate operational pressures.
š MSCās Initiative:
To address the escalating capacity reduction in the Panama Canal,Ā MSCĀ will impose an additional fee ofĀ $297Ā per TEU (Twenty-foot Equivalent Unit) for goods passing through the canal. This surcharge will come into effect on December 15, 2023. Despite recent water-saving measures by theĀ Panama Canal Authority (ACP), persistent low precipitation continues to affect water levels, prompting ACP to further restrict the number of vessels passing through the canal.Ā MSCĀ emphasizes that these restrictions, combined with the previous increase in canal transit fees, directly impact the overall operational costs for MSC.
š CMA CGMās Response:
CMA CGM, acknowledging the severe operational impact of the Panama Canalās transit restrictions, will implement a new Panama Adjustment Factor ofĀ $150Ā per TEU starting January 1, 2024. The company highlights that the canalās measures, due to the most severe drought recorded since 1950, will persist until the end of September 2024. These measures include a stepwise reduction in daily ship passages: from November 3, the number decreases to 25 ships per day, further reducing to 22 ships per day from December 1, and reaching 20 ships per day from January 1, 2024. This reduction in vessel capacity will result in approximately aĀ 40%Ā decrease in the normal shipping capacity of large container ships.
š Impact and Future Projections:
The normal draft of theĀ Panama CanalĀ isĀ 15.24 meters,Ā and with the reduction in draft, the carrying capacity of large container ships will be significantly diminished. Official data reveals that the Panama Canal operates 24/7, accommodatingĀ 13,000 to 14,000 vessels annually. ACPās adjustments are expected to elevate global shipping costs and cause prolonged transportation delays.
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