Panama Canal transit auction bids exceed $1 mln as demand surges

Some ​vessels have recently paid more than $1 ​million at auction to ‌secure transit ​slots through the Panama Canal, the canal's authority said on Tuesday, citing shifts in global trade supply ‌and demand.

The Panama Canal Authority (ACP) said the high bids reflect temporary market fluctuations rather than tariff increases set by the waterway. While median auction prices averaged ‌around $55,000 between October and February, recent high demand has pushed median prices to ‌roughly three times that level, according to the authority. "Auction values are determined by multiple factors, including each client's urgency and commercial priorities, as well as broader supply and demand conditions," ⁠the ​ACP said in ⁠a statement. To conserve water, the canal will cap daily transits at 34 vessels starting Sept. 4, ⁠tightening the limit to 32 on Sept. 15. Unlike the sea-level Suez Canal, the ​Panama Canal uses a gravity-fed lock system that relies on freshwater from ⁠the Gatun and Alajuela lakes. The El Niño weather pattern has diminished the seasonal rains required ⁠to ​replenish these reservoirs, forcing the authority to restrict traffic. To avoid delays or high auction fees, some shippers are rerouting around Africa's Cape of ⁠Good Hope. Roughly half of U.S. liquefied gas carriers bound for Asia chose ⁠the Cape ⁠route in August, extending a typical voyage from Houston to Japan to 45 days from 26 days.