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  May 21st, 2024 | Written by

Panama Canal Crossings Resume, Full Normalization Still Pending

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Liner services impacted by recent restrictions on Panama Canal transits have returned to regular operation this month. The affected services include THE Alliance’s Asia-US East Coast routes, MSC’s Santana service, and the Asia-US East Coast service managed by Hapag-Lloyd and Wan Hai Lines.

Read also: Panama Canal Water Levels to impact Westbound Trade Well Into 2024

These services were forced to reroute through the Suez Canal and then the Cape of Good Hope following the Red Sea crisis at the end of 2023. However, with the increase in Neo-Panamax transit slots at the Panama Canal from May, carriers are restoring these routes to Panama, reducing overall round-trip transit times by one to two weeks.

THE Alliance had to omit 37 sailings since the end of 2023, while MSC resumed westbound sailings for the Santana service on May 9, with a new rotation bypassing the US East Coast to prioritize Central America. Hapag-Lloyd and Wan Hai restarted westbound transits on May 7.

Peter Sand, Xeneta’s chief analyst, noted that although the increased canal transits have not fully resolved the tonnage shortage caused by vessel diversions, the situation is improving. He stated, “On June 15, another slot opens for Neo-Panamax transits, which is another step in the right direction. More importantly, it’s about bringing the draught restrictions back to 50 feet, allowing fully laden boxships to transit.”

Simon Heaney, senior manager of container research at Drewry, pointed out that while canal transits hit a six-month high of 26.3 in April, daily boxship transits averaged seven in April, down from 8.4 in October. Heaney explained, “The easing of restrictions to the Panamax locks hasn’t significantly changed container ship flows through the canal since the sector typically uses the Neo-Panamax locks. Currently, the maximum draught is 44 feet, whereas normal conditions allow for 50 feet. It’s estimated that container ships lose approximately 350 TEU for every foot of lost draught.”

While the situation at the Panama Canal is improving, it will take more time and adjustments, including lifting draught restrictions, for full normalization of operations.