Panama Canal Transit Times Rise on Increased Traffic as Carriers Avoid the Middle East

• Wait times to transit the Panama Canal have increased fourfold as the Middle East conflict has led more carriers to use the alternative route, according to shipping services provider WaterFront Maritime Services.
• WaterFront noted that more vessels are waiting to transit the waterway on both the Atlantic and Pacific sides, largely driven by the ongoing Middle East situation and disruptions in the Strait of Hormuz. The increased traffic has also led to higher auction rates, with winning bids now regularly topping $1Mn, WaterFront said.
• “The Panama Canal traffic conditions remain unchanged, with approximately 36 to 40 vessels transiting daily, all under reserved booking slots,” WaterFront said. “Vessels without prior reservations are expected to face extended waiting times, which we are currently unable to estimate.” Of note, wait times for non-booked vessels have risen from around one day on April 5th to more than 4.5 days as of April 17th.
• As more vessels divert to the Panama Canal to avoid riskier routes, congestion will continue to drive up transit costs and extend delivery times, adding pressure to already strained supply chains. Over time, this will likely translate into higher freight rates, increased costs for goods, and greater uncertainty for industries reliant on just-in-time shipping, from energy and raw materials to consumer products.

(Source: ICIS)