The Panama Canal Authority (ACP) is adding one daily transit slot at the Neopanamax locks and raising the maximum authorized draft to 49 feet, reversing the escalating restrictions it imposed through September as a developing El Niño threatened water supplies.

In an advisory to shipping companies on Monday, the canal operator increased bookings for larger Neopanamax vessels from nine to 10 per day for dates beginning Oct. 15. Total daily capacity across the Neopanamax and Panamax locks now stands at 33 slots.

The draft increase, up from the 48-foot limit set in late August, took effect Tuesday and remains in place until further notice.

For apparel and soft-goods shippers routing Asia-to-U.S. East Coast cargo through the waterway, the easing comes after months of capacity constraints, priority auction costs and surcharges on affected sailings.

Why the reversal

The authority cited current and projected lake levels, near-average precipitation across the canal's watershed and water-saving measures at the locks. The ACP had already postponed a scheduled Oct. 1 draft reduction to 47.5 feet after reassessing forecasts and water levels at Gatún Lake, the rainfall-fed reservoir supplying the lock system.

The canal cut daily transits from 36 to 34 on Sept. 4 and again to 32 on Sept. 15. A fiscal 2027 budget draft submitted to Panama's parliament had penciled in an average of 29.5 daily transits for October, the first month of the fiscal year — a figure built on a severe El Niño scenario.

In late August, the canal's own outlook had Gatún Lake falling by more than a foot by end of October, to 82.6 feet. As of Wednesday, the month's average is expected to be 85.7 feet.

September rainfall drove the change. Observed lake levels climbed from about 84 feet in the first week of the month to 84.8 feet on Sept. 30, per canal data. The September average of roughly 84.3 feet finished above August's 84.2 feet.

The lake still sits about 0.4 feet below the five-year September average of 85.2 feet, but the seasonal pattern favors further gains: the five-year averages are 85.5 feet for October and 86.5 feet for November.

Constraints remain

The authority cautioned that the watershed's water deficit continues and the reservation system remains the only way to guarantee a transit date. Vessels without reservations could face "indefinite" delays, it warned.

Analysts are equally cautious about how long the relief lasts.

"Improved conditions now do not mean that restrictions won't be introduced in the coming months if the expected El Niño negatively impacts the rainy season that normally lasts into January," said Judah Levine, head of research at Freightos, in a market update Wednesday.

The authority has noted that the most pronounced effects of moderate or strong El Niño events tend to surface the following year, as in 1982-83, 1997-98, 2015-16 and 2023-24. During the most recent months-long drought, the operator cut daily transits from 38 to 22.

Congestion eases

The immediate picture is considerably less strained than weeks ago. The authority's dashboard showed 49 vessels waiting to transit Wednesday morning — 48 with reservations, one without — down from 118 vessels (107 booked, 11 unbooked) at the end of August, when average northbound waits had topped 10 days.

The improvement follows months of absorbed costs for shipping lines, which have also handled diverted traffic as disruptions to commercial shipping through the Strait of Hormuz pushed demand toward alternative routes.

Hapag-Lloyd said in mid-September that draft limits had cut cargo-carrying capacity on affected vessels and raised costs through priority auctions, surcharges and alternative routings.

The auction market illustrates the extremes. South Korea's SK Gas paid a record $5.3 million at auction for a Sept. 1 transit by the liquefied petroleum gas carrier G. Spirit, which had sat at anchor off Panama's Port of Balboa since Aug. 19 — topping the $4.6 million record the same company set in early August. The authority said the median auction price from October 2025 through February 2026 was $55,000.

Bulk carriers faced similar pressure. BIMCO reported bulker transits down 22 percent year over year since the beginning of July as vessels competed for limited slots.

For U.S. shippers, the stakes are high. In 2024, 52 percent of canal transits had U.S. ports of origin or destination, and more than 76 percent of transiting cargo was U.S.-bound or U.S.-origin, according to the authority.

"The Canal remains committed to closely monitoring water conditions and rainfall levels and to communicating any further adjustments in a timely manner, as circumstances allow," the authority said.

Sourcing takeaway: The added slot and 49-foot draft restore headroom, but the ACP's own deficit warning means freight buyers should keep reserved slots locked in and hold contingency routings — via U.S. West Coast ports or Suez — through the January rainy-season close, rather than treating the easing as permanent.