According to today's USDA Grain Transportation Report, persistent drought conditions in Panama have forced the Panama Canal Authority to implement, since early April, a series of draft reductions for large vessel transits.
As of May 24, the normal draft restriction within the Panama Canal’s Neopanamax locks (50 feet) had been reduced to 44.5 feet, and further reductions are expected.
Some container ocean carriers have imposed per-container surcharges for services transiting the canal or suggested that customers use alternative vessel services until conditions recover.
During June and July, from 2018 to 2022, U.S. agricultural exporters moved an average of more than 38,000 20-foot-equivalent units (TEUs) from East Coast ports to Northeast and Southeast Asia.
Many East Coast and Gulf Coast exporters rely on the Panama Canal for a faster transit time to Asia than the alternatives around Cape Horn, or eastbound through the Suez Canal.