Panama Canal transit restrictions extended until 2 September

The Panama Canal Authority (ACP) has extended vessel transit restrictions until 2 September.

PHOTO: Port of Balboa at Panama's Pacific Ocean side. Getty Images

Water levels in the 166-mile Gatun Lake, which forms a majority of the Panama Canal, have dropped to multi-year lows this summer under severe drought conditions. The artificial lake's water level has not risen above 80 feet since early June, prompting canal authority to restrict vessel movement through the canal, which has led to significant delays.

On August 4, the Panama Canal Authority implemented 'Booking Condition 3' for Panamax locks until 21 August. Under Booking Condition 3, the number of booking slots available for ships transiting the Paramax locks was reduced to 14. Of these,10 slots were allocated to large-sized ships and four slots to regular-sized ships.

Booking Condition 3 has been extended to 2 September now. Suspension of extraordinary auctions for Panama and Neopanamax Locks will also be extended until then, ACP said.

The restrictions have led to severe backlogs of vessels waiting to cross the waterway from either direction. A total of 129 vessels were in the queue for transit as of this morning, ACP data shows.

Average waiting time for non-booked transits through the Panama Canal has surged to 12 days this month, doubling from six days in July, according to ACP data.

These restrictions have dented bunker demand across Panama's ports. Several bunker buyers are now opting to take deliveries at the US Gulf Coast ports instead of Panama, a trader says. Availability of all fuel grades is normal in Panama’s Balboa and Cristobal.

By Debarati Bhattacharjee

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