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The Panama Canal is operating near full capacity as global shipping patterns shift in response to ongoing disruptions in the Strait of Hormuz, placing fresh pressure on one of the world’s most critical maritime trade routes.
Traffic through the canal has risen sharply in recent weeks, driven largely by increased shipments of crude oil, liquefied natural gas (LNG) and refined fuels from the United States to Asian markets. According to shipping association BIMCO, average daily vessel transits through the canal have climbed 8% year-on-year to around 38 ships a day, close to the canal’s operational limit of 36 to 40 transits.
The increase follows growing instability around the Strait of Hormuz, a key energy chokepoint that handles a significant share of global oil and gas exports. Reduced shipping activity in the Gulf region and security concerns along Middle East trade routes have forced buyers to seek alternative energy supplies, particularly from the US Gulf Coast.
The rerouting of cargoes has significantly increased demand for Panama Canal transit slots, especially among tanker operators. Canal authorities and shipping analysts say waiting times for vessels have increased by nearly 50% compared with last year, with average delays reaching close to two days. Auction prices for last-minute transit slots have also surged as operators compete for limited passage capacity.
Container vessels, LPG carriers, oil tankers and dry bulk ships continue to account for the majority of canal traffic. However, energy carriers have emerged as the primary source of growth this year as trade flows adjust to geopolitical disruptions in West Asia.
Shipping executives say the congestion reflects a broader restructuring of global supply chains, with cargoes increasingly moving along longer and less conventional routes. Some crude shipments that would normally move through the Gulf are now being redirected through the Atlantic Basin and across Panama toward Asia.
The renewed strain on the Panama Canal also raises concerns over future capacity management. The waterway only recently recovered from severe drought conditions that forced transit restrictions during 2023 and 2024. Industry observers warn that another period of low rainfall or El Niño-related weather disruptions could tighten capacity further if elevated shipping demand continues.
Analysts say the latest developments underline the growing vulnerability of global trade to disruptions at major maritime chokepoints, where geopolitical tensions in one region can quickly reshape shipping flows and logistics costs worldwide.
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The Ministry of Ports, Shipping and Waterways has approved a ₹334.89-crore internal flyover at Visakhapatnam Port Authority (VPA) to ease cargo evacuation, reduce congestion and improve the movement of vehicles within the port. The 3.584-km elevated corridor will connect Convent Junction with the Dock Area, separating road and rail traffic and addressing delays caused by frequent closures at nine railway level crossings. The crossings reportedly see around 18 gate closures each day due to high train exchange volumes, resulting in vehicle queues, longer waiting times, increased fuel consumption and higher operating costs. The project was approved by Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal and appraised by the Delegated Investment Board, chaired by the Ministry’s Secretary. Sonowal said the project would address a critical bottleneck at the port and enable faster, more efficient cargo movement. The scope includes civil and electrical works, utility shifting, safety installations and five years of maintenance. Construction will be planned to minimise disruption to ongoing port operations, particularly in key dock areas. The elevated corridor is expected to reduce road-rail conflicts and improve last-mile connectivity, supporting smoother cargo evacuation from the port. The project is aligned with the government’s broader focus on integrated infrastructure development under the PM GatiShakti framework. The flyover is scheduled for completion within 30 months of commencement and is expected to strengthen the operational efficiency of Visakhapatnam Port and its role in India’s maritime logistics network. Follow CARGOCONNECT for more such updates
The Indian government is developing a comprehensive customs playbook covering 100 high-value imported commodities to streamline the country's faceless customs regime, reduce assessment disputes, and enable businesses to access tariff concessions under India's expanding network of Free Trade Agreements (FTAs) more efficiently. The initiative forms part of the next phase of customs reforms aimed at improving trade facilitation and enhancing the ease of doing business. According to officials familiar with the development, the proposed framework will introduce detailed Standard Operating Procedures (SOPs) for each identified product category. These SOPs will provide commodity-specific and origin-specific assessment guidelines, ensuring uniform interpretation of customs rules across ports and customs formations operating under the faceless assessment system. A key objective of the initiative is to simplify the process of claiming preferential tariff benefits available under India's recently concluded FTAs. The playbook is expected to minimise inconsistencies in customs assessments, reduce clearance delays, and lower the number of queries raised during the processing of Bills of Entry. As part of the proposed reforms, customs offi cers handling faceless assessments will be encouraged to limit queries on each Bill of Entry to a maximum of three. The framework will also introduce greater accountability by tracking assessment timelines and holding officers responsible for unnecessary delays. These measures are intended to improve consistency in decision-making while making import clearances more predictable for businesses. The government introduced the faceless customs assessment mechanism to eliminate physical interaction between importers and customs officials, improve transparency, and create a technology-driven clearance process. While the system has strengthened digital processing, businesses have continued to report varying interpretations of customs provisions across assessment groups, particularly in relation to Rules of Origin and eligibility for FTA benefits. According to experts, a standardised assessment framework will help address these challenges by providing clear guidance for customs officers and importers alike. The move is also expected to strengthen confidence among businesses seeking to leverage preferential market access under India's growing portfolio of trade agreements, while supporting faster cargo movement, reducing transaction costs, and improving overall supply chain efficiency. 𝐒𝐭𝐚𝐲 𝐓𝐮𝐧𝐞𝐝 𝐭𝐨 CARGOCONNECT 𝐟𝐨𝐫 𝐥𝐚𝐭𝐞𝐬𝐭 𝐮𝐩𝐝𝐚𝐭𝐞𝐬!
India has emerged as the world's second-largest supplier of seafarers, marking a significant milestone for the country's maritime sector. According to the BIMCO-ICS Seafarer Workforce Report 2026, India now contributes 311,936 seafarers, accounting for 12.16% of the global maritime workforce. The country ranks behind only the Philippines, overtaking China, Russia and Indonesia. The achievement reflects India's rapid progress in developing skilled maritime professionals over the past decade. In 2015, India accounted for just 5.2% of the global seafaring workforce and ranked fifth worldwide. Although its share increased to 6% by 2021, the country remained in fifth position. The latest report highlights a sharp rise in both numbers and global ranking, underscoring the impact of sustained investments in maritime education, training and employment. India's contribution is particularly strong in the officer segment. The country supplies 140,718 officers, representing 13.41% of the global officer workforce, while 171,218 ratings account for 11.29% of the world's ratings serving on merchant vessels. The report estimates the global seafaring workforce at 2.57 million, against a demand of 2.55 million, highlighting a tightening labour market and an ongoing shortage of qualified officers. Following the report, Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal announced the government's Mission 20% initiative, which aims to increase India's share of the global seafaring workforce from 12.16% to 20%. The initiative focuses on expanding maritime training capacity, strengthening shipboard training opportunities, promoting industry-academia collaboration, leveraging digital technologies and encouraging greater participation of women in maritime careers. India's rise as a leading supplier of maritime professionals is expected to further strengthen its position in the global shipping industry while supporting the growing demand for skilled seafarers worldwide. Follow CARGOCONNECT for more such updates
