Maximum vessel draft at the Panama Canal drops to 48.0 feet on August 26 and 47.5 feet by September 3, as Gatun Lake water levels keep falling under a strengthening El Nino. NOAA currently puts the odds at 81% that this becomes one of the strongest El Nino events on record, pointing toward below normal rainfall across Central America through the dry season. Set that 47.5 foot figure against the last real crisis here, in 2023 and 2024, when draft eventually bottomed out at 44 feet, and this round reads like a rounding error by comparison. The queue at the canal says otherwise.
As of August 3, 113 ships were waiting to transit, versus just 40 in early January, nearly a threefold increase, and the largest backlog since May. Wait times are running up to 10 days. The clearer signal is what carriers are paying to skip that line. The canal’s priority passage auction averaged $1.1 million per slot in August, a roughly 1,600% jump from a year earlier, and one container ship reportedly paid $4 million to jump the queue outright. That kind of money moving through the auction system tells you shippers are pricing in more disruption than the current draft cut alone would suggest.
The Canal Authority is framing these cuts as conservation, not crisis, and by the numbers alone it has a case. Gatun Lake remains above where it sat during the 2023 trough. But market analysts at Argus Media have flagged that the projected 2026 decline could end up steeper than that earlier crisis, and it is worth knowing what that earlier crisis actually looked like. At its worst, in February and March 2024, daily transits fell from a normal 36 to 38 vessels down to 22 to 24, a roughly 40% cut in throughput that dragged full year transits down 29% for the fiscal year. Draft fell from a standard 50 feet to 44 feet, forcing container ships to lightload by roughly 2,400 TEU per vessel, at a cost estimated near $3 to $4 million in lost revenue per voyage. LNG carriers were hit hardest of all, down 66%, because a fully loaded LNG vessel drafts close enough to 44 feet that it had almost no margin left. Asia to US East Coast container rates spiked from a normal $3,000 to $4,500 per FEU up to $5,500 to $8,000 or more, and auction slots at the worst of it ran $2.0 to $2.5 million.
The concerning comparison is that this round’s actual draft restriction, 47.5 feet, is nowhere near that 44-foot trough. Yet the backlog and the auction pricing are already climbing at a pace that echoes it. That gap between a modest physical restriction and an aggressive market reaction is exactly why the Canal Authority’s conservation framing deserves a skeptical read rather than a comfortable one. Congestion is also already showing up in unusual ways beyond the main queue, including gas tankers being routed around the standard line entirely.
Three tropical storms have hit China within five weeks, the strongest being Typhoon Dolphin, and Shanghai and Ningbo both saw operations halted for stretches. An estimated 2.4 million TEU of containership capacity is currently waiting around Chinese ports, with berth waits at Yangshan running as long as 12 days, and carriers are already warning of vessel omissions and rolled cargo while that backlog clears over the coming weeks. In the meantime, Trans-Pacific rates are holding well above normal, north of $7,000 per 40ft to the West Coast and over $10,000 to the East Coast.
On the domestic side, Los Angeles rail dwell times are running close to eight days, roughly double the two to four day target, a mix of peak season volume, cargo diverted from East and Gulf Coast ports, and shippers pulling freight forward ahead of anticipated tariff moves.
None of this is isolated. Between a Panama Canal backlog that is outpacing its own restriction, a Chinese port backlog measured in weeks, and West Coast rail congestion running double normal dwell times, this is a moment to build in schedule cushion wherever you can. If a shipment absolutely has to hit a date, budget for the possibility of paying an auction premium at Panama rather than assuming the standard queue will hold. Book earlier than you normally would, and stay in close contact with our team on routing options if reliability on your usual lane starts to slip.