This market structure story tracks auction pricing on the Panama Canal as diverted energy and container flows pile into one of the few remaining east west shortcuts. Bloomberg reported that the container ship Seaspan Benefactor paid $4 million to jump the regular queue, a near record high for the canal authority auction process.
Typical canal transits use a flat rate reservation. The Panama Canal Authority also runs auctions so owners can buy a slot ahead of the backlog. According to people familiar with the private auction data, the $4 million bid was more than double the average of the previous seven days. Seaspan did not respond to a request for comment.
Wait times at the waterway have stretched beyond a week as the Iran conflict curtails traffic through the Strait of Hormuz and Bab el Mandeb. Buyers and sellers of oil, natural gas, fertilizer and chemicals, especially those in Asia, have scrambled for alternative routes. Argus Media data show Neo Panamax size vessels carrying LPG, LNG, crude and refined products waiting about 10 days for Pacific to Atlantic transit, the highest since May.
As of Tuesday the Seaspan Benefactor was positioned on the Pacific side and appeared to be waiting for a northbound transit, according to shipping data compiled by Bloomberg. The canal authority said auction costs have risen with shifts in global trade supply and demand and acknowledged that some bids have exceeded $1 million, but declined to comment on the latest $4 million deal.
Maintenance outages at the locks through September are also squeezing capacity for Neo Panamax vessels. The canal recently cut maximum allowed draft on those locks amid weaker rainfall tied to El Nino, adding another constraint for fully laden tankers and gas carriers that already face higher spot logistics costs.