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Panama Canal Tightens Capacity as Water Levels Threaten Transit Reliability

The Panama Canal Authority announced reduced daily vessel transits beginning in September. The cuts cite water supply constraints tied to below-average rainfall and forecasted severe weather conditions through 2027. The authority cut maximum daily transits from 36 to 34 vessels, reducing Panamax slots from 25 to 23 while maintaining nine Neopanamax positions. A second reduction phase will drop capacity further to 32 daily transits. Watershed rainfall during May through August measured 34% below historical averages, with inflows trailing by 44%. The authority postponed planned draft increases for Neopanamax vessels to September, citing the need to preserve Lake Gatun water supplies for the 2027 dry season while maintaining human consumption reserves. The restrictions carry significant implications for U.S. supply chains, with over 70% of Panama Canal cargo destined for or originating from American ports and approximately 72% of transiting vessels serving U.S. logistics networks.