With 1,200 transits in each direction, container ship traffic through the Panama Canal hit a new high in the first five months of 2025, according to Alphaliner. This is a 4.1% improvement over the previous record established in 2022 for the same period and a 10.2% rise year over year compared to 2024.
The surge is primarily driven by Neo Sub-Panamax vessels, defined as ships with a capacity between 7,500 and 10,000 TEUs, which accounted for over 25% of all container ship movements since January, with a 30.2% year-on-year increase in transits. The increase follows a challenging period for the Panama Canal, which faced severe drought conditions in 2023, leading to significant restrictions and a backlog of 154 vessels by August 2023, with wait times averaging 21 days.
The Panama Canal Authority (ACP) implemented water conservation measures, reducing daily transits and prioritizing bookings for larger vessels to optimize water usage. By November 2024, the ACP reported a financial windfall of $400 million to $450 million in the fourth quarter, attributed to a fully booked system that increased average vessel size, allowing more containers to pass with fewer transits.
Improved water levels in 2025, particularly at Gatun and Alajuela Lakes, have supported the rebound, enabling the canal to operate at near-normal capacity. In contrast, the Suez Canal has seen a significant decline in container ship traffic, with transits of vessels larger than 4,000 TEU becoming rare and Sub-Panamax segment crossings dropping below 100 in May 2025, the lowest since July 2024. In early 2025, US President Donald Trump threatened to “take back” the Panama Canal, citing concerns over Chinese influence.
This coincided with a $19 billion deal involving Mediterranean Shipping Company (MSC) and BlackRock to acquire two key Panama Canal ports, Balboa and Cristobal, from Hong Kong-based CK Hutchison. The deal, part of a larger $23 billion offer for 45 ports worldwide, remains under review and has drawn criticism from China for potential antitrust issues.
Panama Canal Authority (ACP) is a Panamanian government agency established in 1997 to manage, operate, and maintain the Panama Canal following its transfer from U.S. control in 1999. The ACP oversees canal operations, including lock maintenance, water management, and transit scheduling. It generates significant revenue, with projections of over $6 billion annually by 2025, driven by global trade demand.
