CLIENT ADVISORY: Panama Canal Update – December 1

Updated 12.1.2023

What’s the latest

In response to the increasing capacity reductions at the Panama Canal, several major carriers have started applying new surcharges on shipments transiting the waterway. 

Carriers that have announced surcharges: 

• Cosco 
• French carrier CMA CGM
• Hapag-Lloyd
• Mediterranean Shipping Company (MSC)

Carriers considering surcharges: 

• Maersk has warned its customers that it may have to take further action

Other carriers may also look to implement additional costs and shippers should be aware as the situation continues.

The bigger picture

This year’s severe drought conditions, combined with the El Niño weather pattern, are continuing to cause significant challenges at the canal forcing additional cuts to the average daily number of ships allowed to transit the canal. The Canal Authority recently reported October as the driest on record since 1950, with 41% less rainfall than average. 

The Canal Authority continues to urge customers to make reservations in order to transit as programmed. 

According to the Waterfront Maritime Services, supply chains for goods frequently transported through the canal are expected to remain slowed moving forward. This will continue to affect trade between China, Japan, South Korea, and certain regions of the U.S. in particular, as the Panama Canal facilitates 46% of container movement from northeastern Asia to the U.S.

Over the next three months, we can expect the number of booking slots to be cut again, from 25 to 18 at the start of February 2024.

*Source: Waterfront Maritime Services Panama Canal Transit Waiting Times (Nov. 22, 2023)

The bottom line

We are continuing to monitor the situation closely and provide timely updates to those impacted. If you have any specific questions about your shipments, contact your SEKO representative directly. 

WHAT’S NEXT

We are your logistics partner, ready and able to pivot quickly in the face of challenging climatic circumstances. As the delays persist, our team is prepared to help find alternative routes (e.g., West Coast or Suez Canal re-routes, depending on the point of origin), where necessary and create a solution that works for your business and your customers. 

If you have questions, please reach out to your SEKO representative, or email us at hello@sekologistics.com.