Asian shipper pays record US$5.3 million for Panama Canal access

Demand to urgently pass through the waterway has soared after the Iran war upended global trade routes, particularly to Asia

A shipper needing to transit the Panama Canal bid a record US$5.3 million to secure its spot, according to people familiar with the matter.

South Korea-based SK Gas Ltd agreed to pay the sum to travel the canal on September 1, said the people, who could not be identified as the information was confidential. The fee, determined through an auction run by the canal authority this week, breaks the previous high of US$4.6 million set earlier this month, also paid by a shipper controlling a South Korean vessel.

Demand to urgently pass through the waterway has soared after the Iran war upended global trade routes, particularly to Asia. Wait times at the canal have grown to as long as 11 days for vessels that arrive at the waterway without reservations, according to Argus Media.

The Panama Canal Authority has also tightened restrictions on the number of slots starting in September, as well as on how much cargo ships can carry due to likely drought conditions in the region.

The winning auction bid allows the G. Spirit, a liquefied petroleum gas tanker, to travel northbound through the canal. As of Tuesday, the ship was shown positioned on the Pacific side of the waterway, according to data compiled by Bloomberg.