The Panama Canal will cut average daily ship transits to 29.5 starting in October, down from 36 earlier this year, according to a draft budget the canal authority submitted to Panama’s parliament.
The reduction follows a cut from 36 transits to 32 on Sept. 4 and comes as an intensifying El Nino drains Gatun Lake, the freshwater reservoir that fills the canal’s locks. Panama has declared a national emergency over the weather pattern. NOAA’s Climate Prediction Center said in July there was an 81 per cent chance the event would reach “very strong” status between October and December, and a 97 per cent chance it would persist into early 2027. Jose Ramon Ycaza, Panama’s minister for canal affairs, said the approved budget “ensures that the canal continues to operate safely, continuously, efficiently and profitably.”
For most of the world’s shippers, that is straightforwardly bad news. About five per cent of global trade moves through the waterway, and competition for the shrinking number of slots has already turned brutal. Canal officials said average last-minute auction prices climbed from roughly US$135,000 before the Middle East conflict to about US$385,000 in March and April. On Aug. 14, the gas carrier G. Arete paid a record US$4.6 million for a single Neopanamax slot, according to maritime trade outlet gCaptain.
What the international coverage has largely skipped is that Canada sits on an unusual side of this squeeze. The bulk of what this country sells and buys overseas never touches Panama at all.
Nearly half of Canada’s trade with markets outside North America moves through the Pacific ports of Vancouver, Prince Rupert and Nanaimo, according to an economic impact study released Aug. 26 by the three port authorities, the BC Maritime Employers Association and the BC Marine Terminal Operators Association. The study, prepared by InterVISTAS, found the three ports handled a record 200 million tonnes of cargo in 2025 worth $409 billion, including $281 billion in overseas trade, and sustained 152,100 jobs across the country. Those ships sail straight across the Pacific. There are no locks, no auctions and no reservation queue.
That geography is quietly becoming a selling point. Prince Rupert has roughly $3 billion in projects underway, port authority president Kurt Slocombe said in the same release, including the CANXPORT transload hub that opened in August and the Ridley Island Energy Export Facility, a liquefied petroleum gas terminal under construction by AltaGas and Royal Vopak. The partners have said shipments from comparable U.S. Gulf Coast terminals face roughly 24-day voyages because they must clear the canal, while Prince Rupert sits about 10 shipping days from northeast Asia. A canal running at 29.5 transits a day widens that gap rather than narrowing it.
The caveat matters, though, and it is the part most likely to bite. Canada’s constraint is not berth space, it is what happens inland. Traffic diverted to West Coast ports during the 2023 and 2024 canal disruptions ran into rail and trucking limits well before terminals filled up, and nothing structural has changed since. Canadian importers on the eastern side of the country are also genuinely exposed, because Asian cargo bound for Montreal and Halifax, and goods routed through U.S. Gulf and East Coast gateways, still transit Panama or take the longer Cape Horn route. The Swedish Club, a marine insurer, warned this month that rounding South America is no simple substitute.
The practical read for Canadian households is that this shows up as freight cost rather than empty shelves. Auction premiums of the kind the G. Arete paid get priced into the goods those vessels carry, and Canada imports plenty of them indirectly. The direct hit is smaller here than in the United States, but it is not zero.
Ilya Espino de Marotta, who took office Sept. 7 as the canal’s first female administrator, has made water supply and expansion projects her stated priority. Whether the October cut holds depends on rainfall the canal has not been getting.
via Free Malaysia Today (AFP). Additional reporting sourced from the Panama Canal Authority, gCaptain and the Vancouver Fraser Port Authority.
