Published: · Region: Global · Category: markets

Panama Canal’s New Draft Cuts Put Global Shipping on a Long El Niño Squeeze

Panama has lowered the maximum draft for Neopanamax ships to 48.5 feet and plans further cuts to 44 feet by 2027, responding to El Niño‑driven drought without yet slashing daily transits. The move forces container lines, grain shippers and energy exporters into a slow‑burn recalculation of routes and cargo loads through one of world trade’s most critical bottlenecks.

One of global trade’s narrowest arteries is being tightened another notch. The Panama Canal Authority has reduced the maximum permitted draft for ships using its Neopanamax locks to 48.5 feet starting Saturday, the third in a scheduled series of cuts designed to cope with drought conditions linked to El Niño. Officials say they plan to bring the limit down further to 44 feet by 2027, while keeping average daily transits at roughly 36 to 37 ships. On paper, the change looks modest: fewer feet of allowable depth rather than an immediate clampdown on the number of vessels. In practice, it forces operators of some of the largest container ships, bulk…

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