Panama Canal Increases Ship Capacity Amid Drought Recovery

Rising water levels in the Panama Canal have brought optimism for a return to normal operations in container shipping after a year of restrictions due to a severe drought. The Panama Canal Authority has increased the daily number of ships allowed from 24 to 31, with plans to increase this further for larger vessels on June 1. This gradual transition to normal operations aims to alleviate the disruptions caused by water shortages and improve schedule adherence.

While the increase in transit slots offers some relief for container shipping services, experts caution that the situation is not yet back to pre-restriction levels. Peter Sand, chief analyst at Xena, believes that the recovery process will be slow and uncertain, dependent on factors like rainfall. Despite high hopes for a return to normal, the long-term effects of the drought on the Panama Canal may be felt for years rather than months, according to Sand.

The impact of the water shortages in the Panama Canal has been significant, affecting schedule adherence and spot rates for container shipping companies. As the canal slowly resumes normal operations, businesses are urged to brace for a gradual recovery process that relies on unpredictable variables. While the increase in transit slots and draft limits offers some relief, uncertainty remains about the long-term implications of the drought on the Panama Canal and the container shipping industry.

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