Price of Skipping Panama Canal Queues Drops Significantly

The price for vessels to skip Panama Canal congestion lines has reduced significantly from the multimillion-dollar records of recent months, as the queue of ships waiting to cross has lessened and tankers completely avoid the canal altogether. 

The canal’s operating daily slots have had to be reduced to a third of its usual transits because of the ongoing drought conditions exacerbated by El Niño. Because the canal is losing the freshwater that is typically used to operate, the country’s drinking-water supply is under threat. Dry conditions are expected to continue until the start of the rainy season, which is in May or June. 

The average auction price for Neopanamax slots, which permit the largest class of tankers to transit the canal, as of January 11th, was $269,000, according to a Panama Canal Authority spokesperson. Included in that class are also vessels that carry liquefied natural gas. 

Francisco Torné, who is Panama-based and part of shipping agency Waypoint Port Services, stated that these auction prices have been reduced because of the significantly low number of bidders for the Neopanamax slots. 

These same slots had been auctioned up to $4 million in November last year. This huge decrease in demand for slots can be attributed to ships using alternate routes. 

In another critical trade waterway, security concerns continue to escalate around the Red Sea and Suez Canal, which has further disrupted global shipping.