Panama Canal surge pricing: up to $4 million paid out with Strait of Hormuz still closed

Businesses have doled out up as much as $4 million to move boats through the Panama Canal with the Strait of Hormuz effectively closed, according to the Panama Canal Authority, in a move that has created a seismic shift in global trade flows.

While passage through the waterway usually comes at a flat rate via reservations, companies without reservations can cross by paying an additional fee in an auction for slots, which are awarded to the highest bidder rather than waiting for days off the coast of Panama City.

That price has ballooned in recent weeks as Iran and the United States have bottlenecked the key shipping route, the Strait of Hormuz, and demand for those slots has skyrocketed. Ships have increasingly traveled through the Panama Canal as shipments are rerouted and buyers purchase from other countries to avoid commerce through now-treacherous Middle Eastern waterway.

“With all the bombings, the missiles, the drones … companies are saying it’s safer and less........

© Fortune