--- title: "The Panama Canal is rationing transits again as a record El Niño builds" description: "The Panama Canal Authority is cutting daily booking slots and tightening draft limits as rainfall in the canal's watershed runs 34% below normal. NOAA now puts the odds of a very strong El Niño this fall and winter above 90%, which means the restrictions are likely to deepen rather than lift, and shippers have a 2023 precedent for what that costs." category: "Economy" category_url: https://boursel.com/category/economy author: "Marcus Feldman" published: 2026-08-21T07:56:00.000Z updated: 2026-08-21T07:56:00.000Z canonical: https://boursel.com/article/the-panama-canal-is-rationing-transits-again-as-a-record-el-nino-builds tags: ["panama-canal", "shipping", "supply-chains", "el-nino", "trade"] --- # The Panama Canal is rationing transits again as a record El Niño builds The Panama Canal Authority is cutting daily booking slots and tightening draft limits as rainfall in the canal's watershed runs 34% below normal. NOAA now puts the odds of a very strong El Niño this fall and winter above 90%, which means the restrictions are likely to deepen rather than lift, and shippers have a 2023 precedent for what that costs. The Panama Canal Authority is again rationing access to the waterway. Under the advisories issued this week, [reported by The Maritime Executive](https://maritime-executive.com/article/panama-canal-begins-reducing-daily-transits-due-to-declining-water-levels), daily booking slots fall from 34 to 32 in early September, split between nine at the larger Neopanamax locks and 25 at the older Panamax locks, with the Panamax allocation dropping again to 23 in mid-September. Maximum authorized draft for Neopanamax vessels steps down to 48 feet, and to 47.5 feet in October. Draft is the depth of the hull below the waterline, so a draft limit is really a weight limit. A ship that cannot sit as deep in the water cannot carry as much, and on a container vessel the difference between a 50-foot and a 47.5-foot draft runs to hundreds of boxes. ## Why the canal depends on rain The Panama Canal is not a sea-level channel. Ships are lifted about 85 feet above sea level into Gatun Lake, carried across it, and lowered again on the other side. Every one of those lifts spends fresh water, which drains to the sea and is replaced only by rainfall in the surrounding watershed. The same lake also supplies drinking water to a large share of Panama's population, which sets a floor under how far the canal can draw it down. That is the constraint now binding. Gatun Lake is sitting just above 84 feet, [about a foot below its five-year average for August](https://maritime-executive.com/article/panama-canal-begins-reducing-daily-transits-due-to-declining-water-levels). Accumulated rainfall over the May to August period has been 34% below the historical average and water flowing into the watershed 44% below it. For reference, the record low was just under 80 feet in 2003. ## The forecast is the story A one-foot shortfall in August would be manageable on its own. The reason the Authority is cutting capacity now is what the climate forecast says about the months ahead. NOAA's Climate Prediction Center, in its [August 13 diagnostic discussion](https://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/ensodisc.shtml), reported that El Niño conditions are present and strengthening, with sea surface temperature anomalies above +2.0°C in the eastern equatorial Pacific. It put the chance of a very strong event during the Northern Hemisphere fall and winter at greater than 90%, and the chance of an event exceeding any El Niño since 1950 at 69% for the October to December window. El Niño suppresses rainfall over Panama. The canal's dry season normally runs from roughly January to April, so a very strong El Niño peaking in late 2026 would push the watershed into its dry months already depleted. Cutting transits in September is an attempt to bank water for that. ## What the 2023 episode cost The last drought-driven rationing is the useful comparison, with the caveat that it was more severe than what has been announced so far. Daily transits fell to the mid-20s, draft limits tightened sharply, and shippers who had not reserved a slot faced a choice between waiting and going around: either the Suez Canal or the long route around Cape Horn or the Cape of Good Hope, each adding thousands of miles and days of steaming. The clearing mechanism was the auction. The Canal Authority sells a portion of its transit slots, and when supply falls the price of an unreserved slot is set by whoever most needs to go first. [Slot prices reached a record $4 million at the peak of that squeeze](https://www.rivieramm.com/news-content-hub/news-content-hub/record-us4m-panama-canal-transit-fee-gas-carriers-going-the-long-way-round-78501), against a normal range in the hundreds of thousands. Carriers passed the cost on as per-container surcharges. Waiting times give an early read on where pressure is building now. As of August 20, non-booked vessels were waiting an average of 8.5 days northbound and 7.7 days southbound, with 36 ships in the queue. ## Who is exposed The canal carries roughly 5% of global seaborne trade on standard estimates, but its importance is concentrated: the [US Bureau of Transportation Statistics](https://www.bts.gov/data-spotlight/us-trade-and-impact-low-water-levels-gatun-lake-and-panama-canal) has documented how heavily US East and Gulf Coast trade with Asia depends on the route. Container traffic between Asia and the US East Coast is the most exposed lane, along with US grain exports and the gas carriers that have no easy alternative route. For the businesses that use it, the practical exposure is not the transit fee. It is the freight surcharge, the extra days of inventory needed to cover a longer or less certain transit, and the risk that a peak-season shipment misses its window. Those costs land months before they show up in any consumer price index, which is why the shipping data is worth watching now rather than in the spring. ## Sources - [Panama Canal begins reducing daily transits due to declining water levels](https://maritime-executive.com/article/panama-canal-begins-reducing-daily-transits-due-to-declining-water-levels) - [Because of El Niño and a rainfall deficit, the Panama Canal reduces daily transit slots to 34](https://newsroompanama.com/2026/08/20/because-of-el-nino-and-a-rainfall-deficit-the-panama-canal-reduces-daily-transit-slots-to-34/) - [ENSO diagnostic discussion, 13 August 2026](https://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/ensodisc.shtml) - [Panama canal to reduce shipping as El Niño strikes vital route](https://www.theguardian.com/world/2026/aug/21/panama-canal-reduce-shipping-el-nino-drought) - [US trade and the impact of low water levels in Gatun Lake and the Panama Canal](https://www.bts.gov/data-spotlight/us-trade-and-impact-low-water-levels-gatun-lake-and-panama-canal)