The Panama Canal Authority is reducing daily transit capacity and temporarily changing its auction system as below-forecast rainfall increases pressure on the waterway’s freshwater reserves.

From September 3, daily Neopanamax capacity will be limited to nine slots, while Panamax capacity will be set at 25 slots. Panamax availability will then fall to 23 daily slots from September 15.

The decision represents a change from the more optimistic outlook issued earlier in the year, when canal officials expected normal operations to continue through December despite the development of a strong El Niño. Rainfall across the canal watershed has since fallen short of expectations, even after the start of Panama’s rainy season.

The authority warned that reduced capacity could extend waiting times for vessels arriving without reservations. It encouraged operators to use the booking system, stressing that a confirmed reservation is the only means of guaranteeing a transit date.

Near-term improvements in water conditions have, however, allowed the canal to postpone two planned Neopanamax draft reductions. A cut in the maximum authorised draft to 48 feet, previously due to take effect on August 26, has been delayed until September 2. A further reduction to 47.5 feet has been moved from September 3 to October 1.

The canal is also revising the distribution of daily auction slots from September 3. Participants will be separated into four groups: LNG and LPG carriers; dry bulk, general cargo and other vessels; containerships, vehicle carriers and reefers; and chemical, crude and product tankers.

Customers already holding reservations for the same transit date through Long-Term Slot Allocation, NetZero or other allocation programmes will generally be excluded from obtaining an additional slot unless there are no competing bidders. For Neopanamax passages, full containerships offering the highest TEU capacity will receive allocation priority, with the canal’s Customer Ranking used to resolve ties.

Competition for capacity has intensified amid wider disruptions to global shipping. The canal recorded 6,288 transits during the first half of fiscal 2026, an increase of 224 year on year, while cargo volume rose by about 5% to 254 million PC/UMS tons. Average daily traffic reached 37 vessels in March, with some days exceeding 40 transits.

Auction prices have also increased sharply. Canal officials previously said average last-minute bids rose from around $135,000-$140,000 before the Middle East conflict to approximately $385,000 during March and April. Some bids exceeded $1 million, while a Neopanamax auction slot reportedly reached a record $4.6 million on August 14.

The authority has expanded water-saving practices since the 2023-24 drought, including greater use of Neopanamax lock basins, simultaneous lockages for smaller vessels, interior lock gates and lower hydroelectric generation at Gatun Dam. It will continue monitoring rainfall, lake levels and watershed inflows, with further operational changes possible as conditions develop.