by Lloyd's List

IT’S NO surprise that the Panama Canal handled more cargo in the current fiscal year — October 2024 through to last month — than in the prior one, given that the waterway suffered a historic drought in FY24.

What’s more telling is how poorly the latest fiscal year’s cargo numbers rank historically.

Cargo weight in FY25 totalled 244.3m long tonnes, up 16% versus FY24, according to newly released data from the Panama Canal Authority (ACP).

But excluding the anomalous drought-stricken year, this is the lowest overall cargo weight transiting the waterway since FY17, the first full fiscal year to incorporate the larger neopanamax locks, which debuted in June 2016 after being built for a cost of more than $5bn.

Total cargo weight in the latest fiscal year was essentially flat — up just 1% — versus where it was eight years ago, and was 17% below the peak seen in FY22 during the pandemic boom.

Weakness in containership cargo volumes

The primary rationale for the construction of the neopanamax locks was defensive: container shipping had evolved, boxships were growing in size, and the canal needed larger locks to remain relevant in the Asia-US trade.

The ACP publicly releases cargo weight data at the end of each fiscal year. The data it releases each month during the year only covers transits*. The monthly transit data has painted a very positive picture on neopanamax containership traffic.

Despite steep US tariffs on imports from China and other Asian sources, neopanamax containerships transits hit an all-time high this August, and were one transit below that high in September.

However, looking at transits can be deceiving if the cargo weight per transit falls — and that is what happened with neopanamax containerships in FY25.

According to the newly released ACP statistics, only 41.9m tonnes of cargo was carried on boxships transiting the neopanamax locks in FY25, down 22% year on year (y/y). It was the lowest cargo tally for neopanamax containerships since FY18.

Meanwhile, containership cargo through the older panamax locks has continued to decline, and hit a new low for the modern era, at just 7.1m tonnes in FY25, down 20% y/y.

Total containership cargo for both locks combined dropped 21% y/y to the lowest point since FY16, a period when the neopanamax locks were only open for one-third of the fiscal year.

Containership cargo through both locks totalled 49m tonnes in FY25, compared to 39.6m tonnes in FY16 and 53.7m tonnes in FY17.

This lack of cargo growth at the waterway in this segment coincides with a period when US containerised imports have risen much higher.

Between the periods covered by the ACP’s FY17 and FY25, US containerised imports have surged by almost 30%, meaning that the Panama Canal route has lost market share in the US-Asia trade.

Fall in cargo per containership transit

The stats show an even more severe drop in tonnes per transit for neopanamax containerships.

The number of transits for these vessels rose 11% in FY25 versus FY24, depressing the tonnes per transit figure.

Containerships using the neopanamax locks average only 21,202 tonnes of cargo per transit in FY25 (including transits in both directions), a 29% decline versus FY24. The average over the previous eight fiscal years was 32,233 tonnes per transit, 52% higher.

Boxships using the neopanamax locks are not getting smaller. The capacity of the vessels, as measured by PC/UMS tonnage, did not change materially y/y..

Nor was there a y/y increase in the share of transits from the Atlantic to Pacific, which carry less containerised cargo than on the headhaul route.

This implies that neopanamax slot utilisation was lower over the course of the fiscal year. Possible drivers could include fallout from US tariffs, cross-isthmus transhipment, and/or higher sourcing of US imports via the Cape of Good Hope or the land bridge (truck and rail) from the US west coast.

Lloyd’s List sought comment from the ACP on why neopanamax containership cargo levels fared so poorly this fiscal year. It had not replied by the time of publication.

Cargo volumes in other segments

The most important segment for Panama Canal cargo weight is dry bulk, with these vessels overwhelmingly using the older panamax locks.

Dry cargo amounts collapsed during the drought, with bulkers moving grain from the US to Asia shifting to the Cape of Good Hope route.

The main reason that total canal cargo weight was up in FY25 versus FY24 was the partial return of the dry bulk trade following the end of the drought crisis. Dry bulk cargo plunged from 101.6m long tonnes in FY23 to just 44.8m tonnes in FY24, then nearly doubled to 83.8m tonnes in FY25.

Total cargo through the panamax locks rose 32% y/y, driven up by dry bulk, while total cargo through the neopanamax locks fell 8% y/y, driven down by containerships.

Looking at the long-term trends for the main cargo categories, dry bulk cargo has fallen by 12.5m tonnes, or 13%, since FY17.

Containerised cargo, the second-largest category by weight, is down 4.6m tonnes, or 9%, over the same period.

Chemical tankers are the third-largest segment measured by cargo weight; as with dry bulk, these vessels overwhelmingly favour the panamax locks. Chemical tanker cargo is up by 6.6m tonnes, or 17%, since FY17.

Liquefied petroleum gas is by far the biggest gainer, driven by very large gas carrier transits through the neopanamax locks in addition to transits of smaller LPG carriers through the panamax locks.

LPG cargo amounts have jumped by 151%, or 23.2m tonnes, since FY17. LPG cargoes totalled 38.5m tonnes in the latest fiscal year, the highest on record.

Crude and product tanker cargo amounts in FY25 were down 935,264 tonnes or 6% versus FY17. This segment peaked in FY20 at 20.2m tonnes and is down 32% from that high, to 13.8m tonnes in the latest period.

One of the biggest disappointments for the canal is liquefied natural gas, which was once seen as a potential major customer for the neopanamax locks, given the massive buildout of US Gulf liquefaction capacity.

LNG carrier operators shifted away from the canal during the drought crisis and never came back. More US LNG is heading to Europe, and freight rates are historically cheap, making the Cape of Good Hope route to Asia more attractive.

LNG cargo is down 4.6m tonnes, or 26%, from FY17; however, that was before this trade ramped up.

LNG cargo via the Panama Canal peaked at 18.6m tonnes in FY21. Prior to the drought, in FY23, the total was 11.5m tonnes. In FY24, it collapsed to 4.2m tonnes and, in the latest fiscal year, it dwindled further, to just 1.8m tonnes, down 90% from the high point in 2021.