In response to ongoing capacity reductions at the Panama Canal, major container shipping companies, CMA CGM and MSC, are implementing special surcharges, citing the impact of transit restrictions and increased Canal tariffs, according to sources.
CMA CGM has announced a Panama Adjustment Factor of USD 150 per TEU, scheduled to take effect from January 1, 2024. The company attributes this move to the combined pressures of transit restrictions and elevated Canal tariffs, which have collectively taken a “severe toll” on their operations.
MSC, on the other hand, is set to impose a surcharge of USD 297 per TEU for its Asia-US East Coast/US Gulf and Asia/Caribbean services transiting the Canal. This surcharge will be implemented earlier, starting from December 15, 2023.
Despite efforts to conserve water, such as using water-saving basins and cross-filling in the locks, Gatun Lake’s water levels are reported to be at unprecedented lows for this time of the year. The Panama Canal Authority (ACP) responded to this situation in late October by announcing new vessel limits, progressively reducing the number of passages allowed per day.
The imposed limits are as follows:
- 22 passages a day from December 1 to December 31, 2023
- 20 passages a day from January 1, 2024, to January 31, 2024
- 18 passages a day from February 1, 2024, until further notice
Since Q2, the maximum draft for ships transiting the Panama Canal has been lowered from 14.94 to 13.41 meters, resulting in a reduced carrying capacity of neo-panamax ships by up to 1,500 TEU.
Liner shipping, despite facing these restrictions and increased transit fees, has not experienced major disruptions in container vessel movements through the Panama Canal. Liner operators typically reserve their transit slots well in advance, mitigating potential disruptions.
However, the looming 30% reduction in daily transits through the larger neo-panamax lock, starting in January 2024, has raised concerns among carriers. Hapag-Lloyd CEO Rolf Habben Jansen expressed his apprehension, stating that the situation in Panama is of concern. The German carrier is closely monitoring developments, considering the possibility of rerouting one or more loops via the Suez Canal to navigate the challenges posed by the Panama Canal’s evolving conditions.