Vessel wait times at Panama Canal increased more than 40% in August

FILE PHOTO: Cargo vessels transit through the Panama Canal, on the outskirts of Panama City

(Reuters) - The average wait time for non-booked vessels at the Panama Canal jumped by between 44% and 59% last month as a prolonged drought led to restrictions on daily transits and ship drafts.

The Panama Canal Authority began imposing the restrictions earlier this year in a move to conserve water. Only 32 vessels with a draft of up to 44 feet are now allowed to pass everyday, from 36 ships and maximum draft of 50 feet in normal conditions.

The limitations have led to bottlenecks at both ends of the canal, pushed up freight tariffs and forced some vessels to divert to avoid delivery delays, especially those that do not have priority to pass.

Waiting time averaged 8.85 days for southbound transit and 9.44 days for northbound passage in August, from 5.56 days and 6.55 days, respectively, in July, according to data from the Panama Canal Authority.

The waiting time was longer for general cargo vessels, dry bulk carriers and tankers transporting liquefied petroleum gas. Container ships, passenger vessels, refrigerated cargo vessels and vehicle carriers were less affected, the data showed.

The backlog of ships had eased to 117 on Friday from a peak of more than 160 vessels in early August, according to the data.

"To ensure the canal remains open to the world of commerce, the Panama Canal Authority has implemented strategic measures over the past several months ... to mitigate the impacts from climate change and a subsequent dry season," the canal said this week.

The measures are expected to last at least 10 more months, canal officials have said.

Panama has seen a slight increase in rainfall in the past two months, resulting in a stabilization of the canal's water levels after months of sharp declines.

However, rain has not increased enough to raise levels in the waterway, which handles an estimated 5% of the world's entire trade, or to lessen the drought, experts said.

"Panama Canal water levels are likely to remain exceptionally low for months ahead yet, despite short-term improvements in the forecast," said Isaac Hankes, senior weather analyst at London Stock Exchange Group.

(Reporting by Marianna Parraga; Editing by Kirsten Donovan)