Panama Canal Reduces Draft Limits Amid El Niño Drought

The Panama Canal Authority has reduced maximum draft allowances to 13.5 feet for the largest neo-Panamax vessels due to severe drought conditions linked to El Niño, constraining global shipping capacity and forcing carriers to reduce cargo loads or reroute through longer alternatives. This operational restriction directly increases transit costs across major international trade routes and reduces the canal's throughput capacity during a period of elevated global shipping demand. The draft reductions represent the most severe restrictions imposed in recent years, with vessels previously able to transit at 15 feet or deeper now facing significant operational constraints.