Cargo owners are facing a double whammy of higher freight rates and lighter loads due to drought affecting the Panama Canal.
And further increases in the cost of transiting the waterway are expected in the summer, Bloomberg reported.
The severe drought has led to restrictions on the weight of larger vessels from 24 May, and then a further decrease in the allowable load from 29 May.
And some major container lines are hiking freight rates by between $300 and $500 per box from 1 June as a result.
The measures will likely result in delays and higher costs.
The canal has had water supply issues since its 2016 lock expansion to allow bigger ships through.
The country saw 50% less rain than normal between February and April near the canal and its lakes.
Water levels in Lake Gatun could hit record lows by July.
From 24 May, neopanamax ships will be allowed draughts of only 44.5 feet, down from the previous restriction of 45 feet.
This will fall again to 44 feet five days later.
The change could mean 40% less cargo on some boxships, for which a 50-foot draught is normal.
Cargoes to be split?
During the droughts of 2019 and 2016, the draft limit went as low as 43 feet.
“The lower-than-usual water levels in the Gatun Lake are causing severe draft restrictions on vessels transiting the Panama Canal,” German line Hapag-Lloyd said.
Container ships make up 45% of neopanamax traffic. LNG and LPG carriers, and bulkers, are also big users of the expanded canal.
Analysts believe some shippers will split heavier cargo onto two ships, costing an extra $1,500 per container.
Gas carriers are not affected as much as those ships carrying heavier goods,
Canal congestion has been a major factor in lifting VLGC rates over the last year.
