14 Ships Queue at Panama Canal as LPG Tankers Reroute Around South America

For logistics and freight planners, the Panama Canal has long been a near-constant in network design — a predictable shortcut for US Gulf energy cargoes bound for Asia. That assumption is now breaking down. With 14 unbooked vessels queued and northbound waits reaching 8 days, LPG shippers are absorbing million-dollar queue-jump fees, detouring around South America, and even testing ship-to-ship shuttle transfers off Balboa to keep cargo moving.

Growing congestion at the Panama Canal is pushing liquefied petroleum gas (LPG) tanker operators into unusual and costly workarounds, a development that amounts to a stress test for one of the world's most important maritime chokepoints and for the US Gulf-to-Asia energy trade lane that depends on it. A Panama Canal spokesperson said on Friday, August 28, 2026, that 14 vessels were waiting near the waterway without reservations, against a total of 115 scheduled transits. Unbooked northbound ships faced waits of up to eight days, while southbound vessels faced up to four days. Those headline figures understate the commercial pain, because the burden is not spread evenly across vessel classes.

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For logistics and freight planners, the Panama Canal has long been a near-constant in network design — a predictable shortcut for US Gulf energy cargoes bound for Asia.

The congestion stems from two converging forces. The Iran war has rerouted additional traffic toward the canal as operators steer clear of conflict-exposed chokepoints elsewhere, concentrating more demand on Panama. At the same time, drier conditions driven by El Niño have reduced freshwater availability in the canal's lock system, prompting authorities to tighten limits on how much cargo vessels can carry and how many ships can cross each day. Because the Panama Canal is freshwater-dependent — every lockage consumes lake water — a hydrological shortfall converts directly into lower draft allowances, reduced throughput, and longer queues, particularly in the wider Neopanamax locks.

That Neopanamax asymmetry is the most consequential operational detail. The wider vessels are the standard workhorses for hauling LPG from the US Gulf Coast to Asian customers, meaning the worst congestion is landing precisely on the ships that move the most valuable incremental cargo. Traders report that rates and wait times for narrower Panamax tankers, which use a separate set of locks, have not risen nearly as much. The clearest evidence of adaptation is the ship-to-ship transfer observed off Balboa port on Panama's Pacific coast: the Panamax tanker Energia Grandeur, previously carrying LPG across the Pacific toward Japan before making a U-turn, transferred its cargo to the Neopanamax tanker Eneos Wisdom. The arrangement allows the smaller, more readily scheduled Panamax vessel to shuttle back and forth through the canal while the larger Neopanamax acts as a floating hub, keeping LPG flowing steadily to Asian buyers.

For shippers, freight planners, and cargo owners, the message is that canal capacity can no longer be treated as a reliable, price-transparent constant. Some operators are paying millions of dollars to jump the queue through the canal's auction mechanism, effectively converting a physical constraint into a volatile spot surcharge. Others are absorbing even larger costs by detouring around South America, a routing decision that adds thousands of nautical miles and significant bunker fuel expense but may still beat an eight-day idle wait combined with demurrage. The emerging shuttle model off Balboa is a middle path, though it requires extra vessels, careful cargo scheduling, and dependable ship-to-ship transfer services.