El Niño spells dire straits for shippers at the Panama Canal

Draft reduction at the Neopanamax locks and limitations on daily transits at the Panamax lock system have resulted in longer wait times to transit the Panama Canal. Shipowners have been raising freight costs to seek reimbursement for higher transit and demurrage fees; lightering ships by offloading cargo before crossing; or rerouting ships via alternative but longer routes. 

S&P Global Commodity Insights' Barbara Troner, Americas freight senior managing editor, discusses these impacts with Americas tankers reporter Catherine Rogers, containers reporter Laura Robb, and dry bulk reporter Nikolaos Aidinis Antonopoulos. The group discusses how shipping markets have been impacted by the El Niño-induced water conservation measures responding to the extended dry season in the Panama Canal watershed, and what remedial steps shipowners can take to navigate the logistical bottleneck potentially continuing well into 2024. 

Prices in this episode: PCR0500 – North Asia-EC North America $/FEU freight (containers)

GRNOQ00 - DBF Grain New Orleans Louisiana US Gulf Coast-Qingdao China 66kt $/mt Panamax (dry bulk) GRNOJ00 - DBF Grain New Orleans Louisiana US Gulf Coast-Kashima Japan 50kt $/mt Supramax (dry bulk)

TCAUX00 – Medium Range 38kt USGC-Chile Lumpsum freight (tankers)

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