The shipping industry is beginning to take alternative routes to avoid the ongoing restrictions at the Panama Canal as the region continues to suffer from its most significant drought in 70 years. 

Reports have emerged of numerous shipping companies choosing a different way of moving their ships after the Panama Canal Authority (ACP) announced further restrictions to movement through the central shipping lane, allowing just 25 booking slots per day and planning to reduce this further to 18 in February 2024. 

Analysis by container booking platform Freightos found that carriers have also begun introducing surcharges for containers looking to travel through the canal. 

It said: "Two more carriers announced upcoming surcharges for containers transiting the canal due to climbing operational costs, and in addition to a handful of vessels that have already taken alternate routes, THE Alliance announced that three Asia – East Coast services will start rerouting via the Suez Canal." 

THE Alliance carriers such as Yang Ming and Hapag-Lloyd have announced alternative routes for some of their services. At the same time, vessels like Liberian flagged Green Sky have headed down the Strait of Magellan instead of attempting to traverse the canal. 

Analysis by shipping investment advisor Braemar found that only 95 transits were completed by Bulkers through the canal in November, a 60% drop on the 232 recorded during the same period in 2022.