Ocean carriers are seeking hundreds of dollars in surcharges per container tied to low water draft limitations at the Panama Canal which will further tighten Friday.
Mediterranean Shipping Co. (MSC) became one of the latest ocean carriers to issue a surcharge, announcing a $100 per TEU surcharge on shipments between Asia and the US East and Gulf Coasts. The surcharge will take effect on any shipment gated in to a port for shipment as of Aug. 19.
CMA CGM began charging shippers $320 per TEU on cargo brought into a port starting July 25. Hapag-Lloyd similarly plans to charge shippers into North America $130 per TEU starting Aug. 15 for Panama Canal transits.
The new surcharge arrives as the Panama Canal Authority (ACP) will limit neo-Panamax vessels to a 49-foot depth starting this Friday. The July 24 draft limit, which followed a July 3 cut from 50 feet to a 49.5-foot draft limit.
The ACP also has another draft restriction for the neo-Panamax locks scheduled for Aug. 15, when ship drafts will be restricted further to a 48.5-foot depth. The cuts are due to “the potential development of an El Niño phenomenon over the (Gatun Lake) watershed in the upcoming months,” the ACP said.
El Niño is a recurring phenomenon where water temperatures across the equatorial Pacific Ocean temperatures rise above normal levels. Previous El Niño events resulted in droughts that affect water levels on Gatun Lake, the fresh-water reservoir for the canal’s locks.
Through Tuesday, Gatun Lake’s depth was 84.6 feet, slightly under the average 84.7 depth seen for July during the last five years. However, the ACP is forecasting Gatun Lake could drop almost another foot in depth by September.
In June, the National Oceanic and Atmospheric Administration (NOAA) officially said an El Niño has developed in the Pacific Ocean and is “predicted to intensify to a moderate or strong level this fall.” In a July 9 update, NOAA said El Niño could “intensify” through 2026, with the phenomenon likely lasting through early spring 2027.
The last El Nino to hit Panama in late 2023 forced the ACP to limit neo-Panamax drafts to 44 feet and resulted in cutting almost in half the number of daily ship transits through the Canal.