The official Panama Canal transit numbers for November are out — and they’re ugly. November could be the tip of the iceberg. Reservation slots are being slashed further this month and in January.
The total number of transits declined 22% in November versus October, according to just-released data from the Panama Canal Authority (ACP). And for the first time since the drought began, the numbers are not just falling at the older, smaller Panamax locks. They’re also declining sharply at the larger Neopanamax locks, which debuted in 2016.
The Neopanamax locks are a crucial conduit for high-capacity container vessels bringing goods from Asia to U.S. East and Gulf Coast ports, and for liquefied petroleum gas (LPG) and liquefied natural gas (LNG) carriers transporting exports from the U.S. Gulf to Asia.
Transits through the Neopanamax locks fell 28% in November versus October, while transits through the Panamax locks dropped by 19%.
Container ships, LPG ships and LNG ships were all hard-hit on the Neopanamax side. At the Panamax locks, dry bulk shipping was the biggest decliner, by far.
This time of year is the height of the export season for American farmers, when grain cargoes traditionally move via the Panama Canal from the U.S. Gulf to Asia.
These transits have gone off a cliff as grain-laden bulkers have shifted to the Suez Canal: 164 Panamax bulkers transited in October and just 87 in November — a 47% month-on-month collapse.
November was turning point for Neopanamax locks
The ACP also publishes monthly data on average daily transits by lock type. This data shows just how extreme the November drop-off was compared to prior months.
The shipping impact of Panama’s low water levels has been highly publicized since this summer. However, the drought’s effect on Neopanamax transits — and thus, on Asia-U.S. container shipping — only began last month.
Average daily transits through the Neopanamax locks were actually 4% higher during the first 10 months of 2023 versus the same period in 2022, prior to the drought. In October, average daily transits were up 7% year on year.
Then came November. There was an average of 7.37 transits per day through the Neopanamax locks, down 25% from 9.83 per day in November 2022.
In contrast, year-on-year declines at the Panamax locks began back in May. Between May and October, average daily transits through the Panamax locks fell 11% versus the same period in 2022.