Join 150K Subscribers

Weekly insights & expert articles on supply chain, shipping, and international trade.
Last week another, 812 people joined our community

Your Global Trade Knowledgebase

Guides, How-to’s, Downloads and Resources to help you
succeed in Global Trade.
Home » Global Trade News » Millions being spent to “skip the line” at Panama Canal
Last updated on September 7, 2023 by Ben Thompson

Millions being spent to “skip the line” at Panama Canal

Millions being spent to “skip the line” at Panama Canal

Congestion in the Panama Canal, exacerbated by low rainfall and shifts in oil and gas flows, is causing a significant rise in shipping costs. Historically low rainfall has led authorities to cut the daily vessel limit from 40 to 32, resulting in a backlog of over 100 ships. While the Panama government insists the canal is “open for business,” the average waiting time for northbound ships has tripled from June to August.

The bottleneck is affecting freight prices severely. The canal’s congestion has led to an auctioning system for slots driving costs unpredictably higher. Historically, the fee for skipping the queue was around $840,000 for northbound and $400,000 for southbound transits. These fees have surged to as high as $2.4 million recently and if you include the regular fee, the total cost can approach $3 million making alternative routes like the Suez Canal or the Cape of Good Hope financially attractive.

This spike in costs is particularly concerning as the busiest period for the Panama Canal typically doesn’t peak until the fourth quarter. Although rainfall is expected to increase briefly, experts predict low water levels to persist, indicating that high shipping costs and delays may continue for the foreseeable future.

Keep Learning

Download Global Trade Guide

Enter your email to get your FREE guide and weekly trade insights. Unsubscribe anytime.

Download Incoterms® 2020 Guide

Enter your email to get your FREE guide and weekly trade insights. Unsubscribe anytime.

Download Global Trade Guide

Enter your email to get your FREE guide and weekly trade insights. Unsubscribe anytime.

Weekly Insights. ZERO spam
Global Trade Guide

By downloading this content you agree to receive our weekly Global Trade Email Newsletter to help grow your business.

Get Smarter About Global Trade
Join 150K+ subscribers to receive our free weekly 5 minute newsletter on what's happening in the world of Global Trade.
Glossary of Shipping Terms

By downloading this content you agree to receive our weekly Global Trade Email Newsletter to help grow your business.

Millions being spent to “skip the line” at Panama Canal

By downloading this content you agree to receive our weekly Global Trade Email Newsletter to help grow your business.

Export Manager's Guide to Remote Working

By downloading this content you agree to receive our weekly Global Trade Email Newsletter to help grow your business.

Download a Proforma Invoice Template PDF

By downloading this content you agree to receive our weekly Global Trade Email Newsletter to help grow your business.

 

Unit Load Device ULD Air Container Specifications

By downloading this content you agree to receive our weekly Global Trade Email Newsletter to help grow your business.