A graduate on a vessel in the canal (6)
I believe the answer is:
panama
'the canal' is the definition.
'a graduate on a vessel' is the wordplay.
'graduate' becomes 'MA' (abbreviation for Master of Arts).
'on' is a charade indicator (letters next to each other).
'a vessel' becomes 'pan' (vessel or container for cooking).
'a'+'ma'='ama'
'ama' after 'pan' is 'PANAMA'.
'in' is the link.
(Other definitions for panama that I've seen before include "city" , "Central American state" , "Man's hat" , "Land - hat - cigar" , "Great canal in middle America" .)