The cost for shippers to jump ahead of congestion at the Panama Canal has significantly dropped from multimillion-dollar record highs in recent months, as the backlog of vessels to cross has lessened as tankers avoid the canal altogether.

The Panama Canal has reduced its operating daily slots to a third of its usual transit due to ongoing drought conditions exacerbated by El Niño. Losing the freshwater used to operate the canal threatens the country’s drinking-water supply and the dry conditions are expected to last until the start of the rainy season in May or June. 

As of Jan. 11, the average auction price for Neopanamax slots, which allow for the largest class of tankers permitted to transit the canal, was $269,000, according to a Panama Canal Authority spokesperson. Vessels carrying liquefied natural gas are included in that class.

Panama-based Francisco Torné of shipping agency Waypoint Port Services said the final auction prices are reduced due to the very low number of bidders for the Neopanamax slots.

Canal slots had been auctioned as high as nearly $4 million last November. The decreased demand for the slots is due to vessels diverting away from the Panama Canal using alternate routes. In another waterway critical to trade, escalation of security concerns around the Red Sea and Suez Canal has further disrupted global shipping.