– CPSO warns of higher prices and possible supply disruptions

BETWEEN US$8 billion and US$10 billion in annual CARICOM imports could be exposed to growing restrictions on shipping through the Panama Canal, raising concerns about higher consumer prices, increased freight costs and possible supply disruptions across the Region.
According to preliminary analysis by the CARICOM Private Sector Organisation (CPSO), the value represents approximately one-quarter to one-third of CARICOM’s non-fuel import bill, prompting calls for importers and regional governments to prepare for higher landed costs and reduced inventories through the 2027 dry season.
The warning comes as the Panama Canal Authority implements new restrictions on vessel transits amid reduced rainfall and lower water levels in the canal watershed.
Under Advisory A-29-2026, daily vessel transits are capped at 34 for booking dates from September 4, falling further to 32 from September 15.
The CPSO said rainfall in the canal watershed between May and August was 34 per cent below the historical average, while inflows were reportedly 44 per cent below normal levels. The expected intensity of the 2026–2027 El Niño phenomenon could place additional pressure on water availability during the January to April 2027 dry season.
The effects of the restrictions are already being reflected in shipping costs, according to the organisation.
A priority auction slot recently attracted a bid of US$5.3 million, reportedly the highest on record, while major shipping companies, including CMA CGM, MSC and Hapag-Lloyd, have announced additional surcharges on routes dependent on the canal.
CPSO Chief Executive Officer and Technical Director, Dr Patrick Antoine, warned that those additional costs would ultimately affect Caribbean businesses and consumers.
“Auction premiums and low-water surcharges do not stay on the carriers’ books,” Dr Antoine said. “They are passed down the chain to importers, to distributors, and ultimately to the Caribbean consumer.”
He added that when shipping constraints force carriers to reroute vessels or reduce port calls, smaller Caribbean markets could face reduced service frequency and longer delays.
CARICOM countries are among the most import-dependent economies globally, with food, manufactured goods and construction materials largely reaching regional markets through international transshipment networks.
The CPSO estimates that between US$4.5 billion and US$7 billion in goods annually transit the Panama Canal directly, while additional cargo is routed through United States ports before being shipped onward to Caribbean destinations.
According to the organisation, the potential impact on consumers could be felt through both reduced availability of goods and higher prices as longer shipping routes, surcharges and increased freight costs are incorporated into the final landed cost of imports.
The Panama Canal situation is also unfolding against wider pressures on global maritime trade, with disruptions affecting shipping through the Strait of Hormuz.
The CPSO said simultaneous pressure on major international shipping corridors could contribute to increased freight rates, higher fuel costs and additional risk premiums, creating further challenges for petroleum-importing CARICOM states.
Higher energy costs could, in turn, affect electricity, transportation and food prices throughout the Region.
The organisation has been promoting greater regional production and alternative supply arrangements as part of its strategy to reduce CARICOM’s vulnerability to external supply shocks.
The CPSO presented its Derisking CSME Imports methodology to CARICOM Heads of Government during a breakfast meeting in Saint Lucia in July.
The framework examines the Region’s dependence on extra-regional imports and identifies products for which regional production or alternative supply corridors could reduce exposure to disruptions in international trade.
“Every percentage point of import demand we can shift to regional supply is a percentage point insulated from canal auctions, low-water surcharges and chokepoint conflict,” Dr Antoine said.
“Regional resilience is not built during a crisis. It is built before one.”
The CPSO is urging importers to engage shipping companies and logistics providers on possible routing changes, surcharge exposure and inventory planning for the final quarter of 2026 and the 2027 dry season.
It is also continuing discussions on improving regional connectivity through engagements with CARICOM Heads of Government, the World Bank’s Caribbean Reconnect Programme and the proposed Regional Ferry Service initiative.