Panama Canal trims Neopanamax draft by 1.5 feet

The Panama Canal Authority is lowering the maximum authorized draft for Neopanamax vessels in three steps this summer. The limit will be cut by a total of 1.5 feet by mid-August to conserve Gatun Lake water ahead of a forecast El Niño.

This is a precaution, not a repeat of the 2023-24 drought crisis. Daily transit limits remain unchanged. Queues are already shrinking. The ACP says current data does not point to any need for transit restrictions through the end of the year.

The schedule: Each step lowers the maximum draft, or how deep a loaded ship can sit in the water. A lower draft means ships must carry less cargo. The cuts, from the normal 50-foot allowance, run:

The 49.5-foot floor was last used during the 2023 drought, when the first restriction reduced the Neopanamax draft from 50. A separate West Lane dry chamber maintenance outage on July 21 and 22 will reduce Panamax booking slots to 16 from 26. The Neopanamax lane will not be affected.

Then vs. now: The 2023-24 drought forced far deeper cuts. The ACP lowered the Neopanamax draft to 44 feet from 50. It also slashed daily transits to as few as 24, a 43% reduction. Northbound waits topped 15 days. Carriers added surcharges, including $297 per container from MSC and $130 per TEU from Hapag-Lloyd.

This time, the draft is being reduced by only 1.5 feet and the transit calendar remains intact. Northbound waits have fallen to four days from a peak of 11.5 days.

The cost math: A lower draft caps how much cargo a vessel can carry, not how many ships transit. Using the last drought's estimate of 350-400 TEU per foot of draft, a 1.5-foot reduction works out to 525 to 600 fewer TEU per Neopanamax sailing. The ACP has not published its own estimate. US East and Gulf Coast container imports, LNG, and dry bulk carry the most exposure.

For now, carriers using the Panama Canal face lower cargo limits, not the kind of routing changes that pushed freight to the Suez Canal and cross-isthmus rail during the last drought.