Panama Canal transits by bulk carriers have fallen 22% year-on-year since the beginning of July, according to BIMCO, as bulkers face increased competition for limited transit slots, particularly from tankers amid higher US energy exports to Asia.
BIMCO Shipping Analysis Manager Filipe Gouveia said lower water levels linked to El Niño could lead to further transit restrictions and intensify competition for available capacity.
The Panama Canal is an important route for dry bulk trades, with the US accounting for 54% of dry bulk cargoes transported through the waterway. Major commodities include grains, steel, fertilisers, coal, salt and petcoke, mainly carried by Supramax, Handysize and Panamax vessels.
The Panama Canal Authority has progressively tightened restrictions to conserve water in Gatun Lake. The maximum draught for vessels using the Neopanamax locks has been reduced from 15.2 metres (50 feet) to 14.3 metres (48 feet) since July. Daily transits were cut from 36 to 34 vessels on September 4 and further reduced to 32 on September 15. A proposal submitted to Panama’s parliament envisages an average of 29.5 daily transits in October.
While draught restrictions have so far had limited direct impact on dry bulk shipping, as most bulkers use the Panamax locks, the measures have affected some Capesize vessels carrying coal from Colombia to Mexico.
The impact on dry bulk shipping is expected to increase as the US maize and soybean export season approaches its peak. Around 15% of US seaborne maize and soybean exports normally transit the Panama Canal en route to East Asia and the west coast of the Americas.
With competition for transit slots increasing, more bulk carriers are expected to reroute via the Cape of Good Hope or Cape Horn, while some US exports could shift to Pacific Coast ports. Longer alternative routes would increase average sailing distances and global dry bulk tonne-mile demand.
During the previous El Niño in 2023–24, reduced Panama Canal bulker transits and subsequent rerouting increased global dry bulk tonne-mile demand by around 1%, according to BIMCO.