Summary:
- Panama Canal container vessel traffic is exceeding pre-drought numbers despite broader global freight slowdowns, driven in part by rerouting away from the Red Sea.
- Berthing times at Puerto Colon dropped by 47% from a high of 23.5 hours in July 2024 to just 10.6 hours in August 2025, reflecting significant operational recovery.
- Average transit times through the canal have remained stable within a narrow 45-minute range over the past several months, even as port volumes surged.
Overview
In late 2023, the Panama Canal Authority reduced daily vessel capacity due to an extreme drought that significantly lowered water levels in Gatun Lake—the primary source of freshwater used to operate the canal’s locks. Daily transits dropped from 36–38 vessels in July 2023 to just 18 per day by February 2024. These restrictions persisted well into 2024, with full operational capacity only restored by August 2024.
For over a year, one of the world’s most critical maritime chokepoints faced severely limited throughput, triggering elevated berthing delays and transit time volatility.
Now, the Panama Canal is once again operating at full capacity, and vessel volumes are surging. This rebound is partly due to shippers avoiding the Red Sea due to geopolitical tensions, leading them to seek alternative routes, such as the longer route around the Cape of Good Hope. The canal is functioning smoothly, and large-scale infrastructure projects are underway to prevent future drought-related disruptions.
Vessel traffic through the canal
The drought restrictions affected all vessel types, but container vessels were the most significantly impacted. The chart below shows monthly vessel counts by ship type from January 2023 through August 2025.
During peak drought conditions, fewer than 250 container vessels were able to transit the canal per month, a steep drop from pre-drought levels of 300–330 vessels. This decline is due to the greater freshwater requirement to accommodate container vessels, which are typically larger and heavier. Their draft demands higher water levels to avoid grounding in the shallow canal.
Despite broader cooling in global ocean freight volumes, container traffic through the Panama Canal has sharply rebounded since mid-2024. This suggests strong regional demand and renewed canal competitiveness, partially fueled by the avoidance of the Red Sea and Suez Canal due to the Houthi vessel attacks in the region.
The chart on berthing times highlights the operational pressures faced by ports adjacent to the Panama Canal, particularly during and now as volumes surge through the canal. Among the two primary terminals, Puerto Colon, located on the northern (Atlantic) entrance to the canal, experienced the most significant disruptions. During the height of the drought in 2024, median berthing times at Puerto Colon soared, peaking at over 23.5 hours in July. Although conditions temporarily improved, delays surged again in March 2025, reaching just above 22 hours. Encouragingly, by August 2025, the port saw a substantial improvement, with median berthing time dropping to just 10.6 hours, a 47% reduction from the July high, signaling a strong recovery in operational efficiency.
Panama City (Balboa), located on the southern (Pacific) side of the canal, maintained comparatively more stable berthing times throughout the same period. However, this port was not immune to recent fluctuations. Between June and July 2025, median berthing time jumped sharply from approximately 11 hours to over 15 hours, marking a 34% increase. Although August showed early signs of recovery, the berthing time remained elevated at around 13.9 hours.
These patterns indicate that while both ports are facing challenges from the resurgence in vessel traffic, operations have notably improved since the peak of the drought. Despite recent spikes, berthing times across both terminals are generally healthier and more consistent than those observed during the most restricted periods in 2024.
While berthing times remain a pressure point, transit times through the canal itself have remained relatively stable. As shown in the third chart, the average transit time has fluctuated by only about 45 minutes over recent months, maintaining a range of roughly 11.0–11.6 hours.
Conclusion
The Panama Canal has transitioned from severe drought-driven restrictions in 2023 and early 2024 to full operational recovery by mid-2025. While transit times through the canal have remained stable, berthing times at Puerto Colon and Panama City have fluctuated, reflecting the pressure from rising vessel volumes. Despite these challenges, conditions have improved significantly, and ongoing infrastructure upgrades suggest a more resilient and efficient future for this vital trade route.
