Fresh draft restrictions at the Panama Canal are set to increase costs for container shipping lines, with industry estimates suggesting that every 10 centimetres of lost draft capacity could strip more than $400,000 worth of cargo from a single voyage.
The Panama Canal Authority (ACP) has announced a new round of navigation limits as falling water levels in Gatún Lake — driven by the return of El Niño — begin to affect operations at one of the world’s most important maritime trade routes.
Under the revised rules, vessels using the Neopanamax locks will be limited to a maximum authorised draft of 14.94 metres in Tropical Fresh Water (TFW) from 24 July 2026.
The restriction will tighten further on 15 August, when the maximum authorised draft will be reduced to 14.78 metres TFW.
The measures echo the disruption caused by the previous El Niño event in late 2023 and early 2024, when prolonged drought depleted Gatún Lake, the freshwater reservoir that powers the canal’s lock system.
At the height of the crisis, daily vessel transits were slashed from the normal 38 to as few as 22, while strict draft limits triggered lengthy queues and widespread disruption to global supply chains.
Although the latest restrictions are less severe, they will still force carriers to reduce cargo loads in order to comply with the lower draft limits, directly affecting vessel utilisation and voyage revenues.
Shipping consultancy Dynamar estimates that, for a typical 366-metre by 51-metre container ship with a capacity of around 14,000 TEU and a deadweight of approximately 153,000 tonnes, every 10-centimetre reduction in authorised draft translates into roughly a 1% loss of effective deadweight capacity.
However, shipping analyst Darren Wadey noted that effective cargo losses are even more tangible for container operators.
“Deadweight includes crew, bunkers, stores and cargo,” Wadey explained. “In practical terms, carriers are likely to lose around 100 containers of cargo capacity for every 10 centimetres of draft reduction.”
With Xeneta’s latest spot market data showing average Asia–US East Coast freight rates at $8,362 per FEU, the financial impact quickly escalates. Based on current pricing, each 10-centimetre reduction in draft could represent more than $400,000 in lost freight revenue on a single sailing.
The ACP said the restrictions are based on current and projected water levels in Gatún Lake over the coming weeks, but the industry remains wary that additional limits could follow if dry conditions intensify through the remainder of 2026 and into next year.
The previous El Niño demonstrated how quickly the situation can escalate. As water levels continued to fall in 2023, competition for scarce transit slots intensified, with auction prices exceeding $2.4 million by September of that year as ship operators paid record sums to avoid costly delays.