by Breaking down the rumors about canal bottlenecks and carrier capacity
Heading into this month’s High Point Market, two of the more persistent rumors had the Panama Canal’s water woes redirecting container traffic to Long Beach, California, and the big oceanic shipping companies taking freighters out of circulation for “maintenance.” If true, that combo would add up to longer delivery times, higher costs and surcharges even on top of contract-stipulated pricing. And we haven’t even mentioned tariffs or El Niño.
Fortunately, unlike the Panama Canal’s reservoir, neither rumor really holds water. Each does have at least a grain of truth, however, so let’s break it down.
For the first rumor that has the Canal at record low levels, it is true that a drier watershed lowered Gatún Lake, the canal’s primary source of water, which forced authorities to cut the number of crossings and sometimes cargo weight, as well. This did contribute to a record volume for the port at Long Beach.
But, the canal only very rarely becomes impassable. It narrows, like a highway that loses lanes, but it doesn’t close. Doing the fact-checking for this column, I learned that every ship that crosses Panama spends some of the water in Gatún Lake, and only rain refills the lake. Because the canal’s locks work like a water elevator, lower levels of water mean a slower elevator.
Normally, ships are lifted about 85 feet to enter the lake. After sailing across, they are lowered again, and each run sends roughly 50 million gallons of fresh water out to sea, according to a website administrated by the United Nations.
The same website explains that Gatún Lake is like a kitchen tap, because it supplies drinking water to about half of Panama’s population. In a dry year, like 2026, the canal authority rations between ships and households, or between the kitchen tap and the bathtub that is the canal. Rationing also took place in 2016 and in 2023, according to Reuters news service. The normal capacity of canal crossings is 36 to 38 freighters per day. When water levels drop, that range drops, too, and in 2023, it fell to 24, followed by a record 18 in February 2024.
Running normal
When I heard the rumors, my first thought connected the canal’s supposed woes to climate change. My research found a direct connection to El Niño, but not necessarily to human-caused global warming. A natural and recurring Pacific weather cycle, El Niño is seen as the cause of the 2023 drought that caused the canal to constrict traffic because it dried out Panama’s rainy season, according to an international scientific collaboration, World Weather Attribution. The same could happen this year, but it has not happened yet.
Climate change might have more to do with the increased frequency of drier rainy seasons in southern Central America, which includes Panama. Canal officials themselves cite those of 2016, 2019 and 2023, because before this stretch of three dry rainy seasons in a span of seven years, the phenomenon came only once every 15 to 20 years.
To return to the rumor, the frequency of El Niño cycles has meant shorter recovery periods for the lake. And thirstier locks mean slower through times. Fortunately, wetter seasons in 2024 and 2025 refilled Gatún Lake such that the canal returned to full capacity last year.
This brings us to 2026 and the return (again) of El Niño. While the squeeze this year is real, it’s nothing like the one in 2023. According to Trans-Border Global Freight, daily slots for canal crossings fell to 32 in September this year and as of the High Point Market were running at 33 per day. Canal authorities planned for El Niño by saving water starting last December. Then, in September, rains took Gatún Lake to slightly above its 10-year average, according to Hellenic Shipping News.
Early 2027 key
With forecasters predicting El Niño to peak between now and the first of the year, or just before Panama’s dry season begins, we will be watching the canal and Gatún Lake. If water levels stay in the normal range, the all-water route for furniture from Asia through Panama and into Savannah or Charleston should remain a 28- to 35-day journey. If they drop, it might mean Long Beach and the railroads.
Longer term there is good news. Construction is supposed to begin next year on a $1.6 billion reservoir that the canal’s authority says will secure a water supply for the next 50 years. The bathtub is getting a second tap.
As I mentioned, the volume going through Long Beach does point to problems with the canal. And while this key port just reported for September its busiest month in its 115-year history, according to Container News, the result this time wasn’t gridlock. Even congestion wasn’t a problem, despite traffic of nearly 1 million TEUs, or fully 25% over the volume through Long Beach in September last year. (A TEU is a 20-foot equivalent unit, the standard container size.)
The Port of Los Angeles also reported a record September, handling more than a million TEUs and surpassing its previous monthly record set in July 2025 by more than 20,000 units, according to MyNewsLA.com.
Long Beach’s CEO, Noel Hacegaba, cited access restrictions in Panama as one of the reasons for the Long Beach record. But, detours mean higher costs door-to-door. Spot rates for the Shanghai-Los Angeles route increased 182% in August this year compared to August a year ago, to point to one example.
And while using Long Beach is actually a quicker solution than bringing goods in through Savannah or Charleston via the Panama Canal, at least under normal conditions, it also means using the railroads, which adds more cost.
Throttling container demand
Next, let’s look at the rumor that has the big shippers throttling supply by citing maintenance demands. I didn’t expect to be able to confirm this, and while I did find plenty of evidence that carriers more straightforwardly pull capacity off the water to affect freight rates, I also discovered that this throttling is done in the open, much as OPEC does with oil. Analysts even track it.
The shipping industry calls this throttling “blank sailing,” and a news report from May this year quotes the head of research at Freightos as saying that carriers were getting more aggressive about capacity management to defend rates amid weak demand growth, high fuel costs and geopolitical disruption. (Freightos is a global, vendor-neutral digital logistics platform and online marketplace.) And one of the container lines reported “blanking” 10% to 14% of its scheduled capacity on four key east-west trades in the first half of 2026.
In short, it looks like maritime carriers bought new ships but then canceled sailings faster than they added them. Over a recent five-week stretch, Drewry forecast 49 blank sailings, or about 6% of scheduled departures, mostly on the eastbound transpacific routes. (London-based Drewry is author of the Drewry World Container Index, a composite benchmark that tracks ocean container spot and short-term contract freight rates.)
I also learned that blank sailing is different from “idling,” the latter of which is probably from where the rumor came. Idle ships just sit in shipyards, in contrast to a canceled sailing, which is like a canceled flight. According to one trade publication, Ship & Bunker, idling is affecting less than a percent of the global fleet, so it simply isn’t a factor.
Drydocking carriers for maintenance increased a tick last year, but this year it dropped back down under 1% of total fleet capacity, according to Ship & Bunker, remaining “exceptionally low” into the present.
What to do?
So, to sum up, carriers pulling ships to prop up rates? Absolutely, openly and increasingly. Disguising it as maintenance? Not really, no, though the timing of maintenance can be interpreted different ways. When including idling and/or drydocking? Nope; no evidence of unusual throttling.
What, then, should importers do? It helps that the Panama Canal’s warnings arrive in a fairly predictable order. If rainfall changes, the lake level drops. This spurs draft notices. Next, slots are cut and the price of jumping in line goes up. Importers should watch for the signals and track the authority’s advisories. A draft notice is a two- to four-week warning that eastbound capacity will tighten.
Second, keep a close eye on El Niño the rest of the year.
Third, with the deferred Section 232 tariff increase taking effect Jan. 1, 2027, anticipate a surge in imports before then. This one is going to hurt. And budget for surcharges by asking the carriers and forwarders how canal changes might alter pricing for landed goods.
Importers, logistics specialists and supply chain managers have my deepest respect. The number of variables is bewildering, and there is so much that can go wrong. I say a little prayer each and every time I see a transhipper on I-75.
