Congestion is building at the Panama Canal just as authorities prepare for maintenance works next month that are expected to further reduce transit capacity, raising fresh concerns over delays and soaring freight costs across multiple shipping sectors.

The Panama Canal Authority has scheduled dry chamber maintenance on the east lane of the Gatun Locks between June 9 and 17. During the works, available daily transit slots will fall to 16, with ships forced to use the west lane, increasing passage times.

The timing is awkward for global shipping markets already grappling with rising queues at both ends of the canal, driven largely by rerouted trade flows linked to the ongoing Strait of Hormuz crisis.

Scandinavian investment bank SEB warned today that congestion risks are escalating rapidly.

“Congestion at the Panama Canal is already building,” SEB noted, citing average waiting times of 47.9 hours so far this month – around 60% higher than pre-war January-February averages.

The bank warned the upcoming maintenance window could intensify delays further, potentially forcing some vessels either into extended waiting times or costly rerouting via the Cape of Good Hope.

“Both tighten effective VLGC supply,” SEB said, adding that the backdrop remains particularly supportive for LPG freight markets, where US Gulf rates are already trading at record highs near $185,000 per day.

The congestion concerns are also being amplified by growing weather risks.

The US National Oceanic and Atmospheric Administration now estimates an 82% probability of El Niño returning between May and July, with up to a 37% chance of a severe event by year-end. Historically, El Niño has reduced rainfall in Central America, lowering water levels in Gatun Lake – the canal’s main freshwater source – and forcing transit restrictions.

The canal authority, however, has sought to play down fears of a repeat of the severe drought disruption seen earlier this decade.

Officials said there are currently no plans to restrict vessel traffic during the remainder of 2026, stressing that water conservation measures introduced since last year have helped maintain Gatun Lake at relatively high historical levels.

The authority also emphasised that the canal continues to handle around 38 ships per day despite rising demand.

Still, signs of strain are becoming increasingly difficult to ignore.

Splash reported last week that auction prices for priority Panama Canal transits had surged to an unprecedented $4m per vessel, surpassing levels seen during the previous drought crisis.