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Canals

Suez and Panama canal transits

The Suez and Panama canals cut thousands of miles off a voyage. That saving is not free. Each canal charges a toll, each has size limits, and each can make a ship wait for its turn. Whether to transit is an estimate question: the toll and the waiting days on one side, the fuel and sea days saved on the other.

How the Suez Canal charges

Suez tolls are charged on Suez Canal Net Tonnage (SCNT). This is a measurement of the ship's volume made to the canal's own rules, so it differs from the ship's ordinary net tonnage and has its own certificate. The tariff is set in Special Drawing Rights (SDR), a unit of the International Monetary Fund, and converted into the currency of payment. Rates differ by ship type and by whether the ship is laden or in ballast.

The Suez Canal Authority also offers rebates to win traffic back from the route round Africa. They are decided case by case, by ship type, cargo, route and market conditions. An agent must apply before the ship leaves its last cargo port, at least 48 hours ahead, and the toll is paid before arrival. A rebate is never assumed in an estimate until it has been granted.

How the Panama Canal charges

The Panama Canal charges each transit in two parts: a fixed charge by the size of the ship, and a capacity charge by type and size. The unit depends on the market segment. Since January 2025 dry bulk ships pay per tonne of deadweight, tankers pay per tonne of Panama Canal Universal Measurement System net tonnage (PC/UMS), container ships pay per container slot, and LNG carriers pay per cubic metre. Each rate is lower for the larger Neopanamax ships. As one example, the published dry bulk rate effective 1 January 2025 is 1.65 dollars per tonne of deadweight for a regular ship and 0.80 for a Neopanamax ship, plus the fixed charge.

The toll is only part of a canal call. Pilots, tugs, line handlers and the agent's fee are charged as well, so an estimate should use the agent's figure for the whole call, not the toll alone.

Size limits

The Suez Canal has no locks, so the limit is mainly the ship's draft and air draft, which the agent checks against the canal's current rules.

Panama has two sets of locks. The original Panamax locks set the size of the Panamax bulk carrier. The Neopanamax locks, opened in 2016, take much larger ships. In 2021 the Panama Canal Authority raised the maximum length for regular Neopanamax transits to 370.33 metres and offered a draft of 15.24 metres. The draft is not fixed. It depends on the water in Gatun Lake, which feeds the locks, and it falls in a drought.

Slots and waiting

Panama limits the number of transits each day. A ship can book a slot in advance, or arrive without one and wait in the queue. Unbooked ships can also bid for slots at auction. In the 2023 and 2024 drought the canal cut daily transits and the maximum draft. Backlogs reached 154 ships and waits of up to 21 days, and auction prices reached records. In August 2026 the canal authority again reported unbooked ships waiting about eight and a half days and urged customers to book.

So an estimate through Panama needs two numbers that change: the expected waiting days for an unbooked ship, and the booking or auction cost to avoid them. The waiting days cost hire or lost earnings plus fuel at the idle rate.

When owners go round instead

The longer route round the Cape of Good Hope avoids the Suez toll but adds distance, days and fuel. From late 2023 attacks on ships in the Red Sea made most container lines and many tanker and bulk owners take the Cape route for safety, not cost. One shipping research estimate in January 2024 put the extra cost for an Aframax tanker from Asia to north-west Europe at about 930,000 dollars, with the voyage growing from 16 to 32 days. War risk insurance for the Red Sea became a major cost of its own.

Even in normal times the canal is not always the cheaper choice. The Suez Canal Authority itself names voyages where the Cape route costs less, and fast or slow steaming changes the answer: at low speed and low fuel prices the extra miles cost less than the toll.

How a canal shows in an estimate

Run the voyage both ways and compare the time charter equivalent. The route with the higher daily figure is the better voyage, whichever has the smaller toll. The sea distance calculator gives both distances.

References

How a ship is measuredTonnage is a volume, deadweight is a weight, and the canals keep a third set of figures. Where each number on a ship comes from. Navigating limits and AWIWLFour letters on a recap that point to a hull insurer’s list of sea areas. Most are excluded only in winter, and none is forbidden outright. Kamsarmax vs PanamaxSame beam (width), longer hull, deeper draft. Where the two names come from, what each ship can carry, and which limits still bind. War risk areasAn insurers’ list of sea areas, not a report of last week’s attacks. What being inside one does to the premium, the crew, the route and the rate. Time charter equivalentFreight per tonne cannot be compared with hire per day until you divide it by the voyage. This is the arithmetic that does it. Port agency and disbursementsSomebody has to meet the ship. Who appoints the agent, who the agent answers to, and how a PDA becomes an FDA.

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