The Panama Canal is rationing transit capacity and cutting maximum neopanamax draft ahead of an expected El Niño-driven drought, with Gatun Lake levels forecast to keep falling through October, according to Splash247.
Data from the Panama Canal Authority (ACP), charted by Braemar, shows Gatun Lake levels falling steadily through August, September and October — months that ordinarily form part of Panama’s rainy season, Splash247 reported. The ACP’s latest projections put the lake at around 25.6 m today before dropping towards 25.3 m by early October and below that later in the month. Panama’s rainy season typically runs from May to November, with September and October among its wettest months, the publication noted.
Capacity and draft cuts
The canal is already acting, according to Splash247. Daily booking capacity was cut from 36 vessels to 34 in late July, while the maximum authorised neopanamax draft will fall to 14.6 m on August 26 and 14.5 m from September 3. ACP administrator Ricaurte Vásquez Morales has already warned that further capacity restrictions are likely if conditions deteriorate, including additional draft reductions and cuts to daily booking slots, Splash247 reported.
Gatun Lake projections and El Niño odds
The US National Oceanic and Atmospheric Administration (NOAA) last week raised the probability of a very strong El Niño during the Northern Hemisphere autumn and winter to more than 90%, Splash247 reported. More strikingly, its Climate Prediction Center puts the probability of an event exceeding the strength of every El Niño recorded since 1950 at 69% during October-December, the publication said.
| Metric | 2023-24 worst point | Current measures (as of late August 2026) |
|---|---|---|
| Neopanamax draft limit | ~13.4 m | 14.6 m from Aug 26; 14.5 m from Sep 3 |
| Daily booking capacity / passages | ~22 passages | 34 booking slots (cut from 36 in late July) |
For now, the measures are a far cry from the extreme restrictions of 2023-24, when neopanamax draft limits fell to around 13.4 m and daily passages were eventually reduced to roughly 22 at the worst point of the drought, according to Splash247. But the trajectory is concerning, the publication said.
Carrier surcharges
Carriers have started pricing in the risk, Splash247 reported. MSC introduced a $100 per TEU Panama Canal surcharge from today on cargo moving from Asia to the US east and Gulf coasts, while CMA CGM has also increased canal-related charges, the publication said.
Dry bulk tonne-mile boost
For dry bulk, a return of serious restrictions could actually provide a significant tonne-mile boost, according to Splash247. Braemar estimates that Panama diversions during the 2023 drought added around 1.1% to overall bulker tonne-mile demand, with supramax and ultramax ships receiving the largest uplift at approximately 2.2% as vessels rerouted on substantially longer voyages, the publication reported. The 2023 experience saw bulker transits fall sharply from the fourth quarter onwards as owners weighed expensive auction slots and long queues against sailing around South America or taking alternative routes, Splash247 said.
Watch list
- El Niño strength: NOAA’s Climate Prediction Center puts the probability of an event exceeding every El Niño since 1950 at 69% during October-December — if realised, further ACP restrictions are likely.
- ACP decisions: Administrator Ricaurte Vásquez Morales has warned that additional draft reductions and cuts to daily booking slots are possible if Gatun Lake levels keep falling.
- Carrier surcharges: MSC’s $100 per TEU surcharge is already in effect; CMA CGM has raised canal-related charges, and other carriers may follow if restrictions tighten.
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