While the Red Sea and the Black Sea continue to dominate shipping headlines, the Panama Canal—previously a source of supply chain disruption—has returned to full operational capacity.
For 15 months during 2023 and 2024, the canal faced severe drought conditions caused by El Niño, leading to restrictions on vessel draft and the number of daily transits. However, this year, the canal successfully maintained a 50-foot (15.24 m) draft throughout the entire dry season. According to Panama Canal Administrator Dr. Ricaurte Vásquez Morales, a relatively wet rainy season is expected, allowing the canal to prepare for the next dry season at the start of 2026.
“LNG and container transits have increased, and dry bulk volumes have recovered compared to last year,” Vásquez noted in a recent market review.
The Panama Canal Authority is actively advancing a large-scale $1.6 billion reservoir expansion project, which, once completed, will enable the canal to handle an additional 15 vessel transits per day.
From June 2023 to September 2024, vessel transits through the Panama Canal were limited due to low water levels in Gatun Lake, forcing a significant portion of the global merchant fleet to reroute. Restrictions were imposed on both the total number of daily transits and vessel draft, with ships competing for a limited number of transit slots.
Now, the Panama Canal has fully restored its operations, continuing to serve as a critical link in global trade.
