Even as businesses spend $4 million to cross Panama Canal, they say ‘it’s safer and less expensive’ than the Strait of Hormuz

Businesses have doled out as much as $4 million for last-minute plans to move boats through the Panama Canal in recent weeks, the Panama Canal Authority says, as Iran war’s effective closure of the Strait of Hormuz generates a seismic shift in global trade flows.

While passage through the canal usually comes at a flat rate via reservations, companies without bookings can pay more to cross through an auction that awards slots to the highest bidder. The alternative would be waiting for days off the coast of Panama City.

The demand for slots skyrocketed and the auction prices ballooned in recent weeks as a standoff between the Iran and the United States over access to the strait kept traffic bottlenecked. Commercial vessels increasingly have traveled through the Panama Canal carrying shipments that were rerouted or purchased from different countries to avoid the waterway off Iran’s coast.

“With all the bombings, the missiles, the drones … companies are saying it’s safer and less expensive to cross through the Panama Canal,” said Rodrigo Noriega, a lawyer and analyst in Panama City. “All of this is affecting global supply........

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