Panama Canal to Cut Some Tolls in June

Photo courtesy Panama Canal Authority

Peter T. Leach



May 1, 2009 1:09PM GMT



The Journal of Commerce Online - News Story

Increases take effect May 1 but concessions to mitigate economic crisis

In a concession to financially pressed shipping lines, the Panama Canal Authority will cut back some tolls and fees while giving carriers greater flexibility in reserving movements through the canal.

But the canal authority also left in place new toll increases going into effect May 1, rejecting calls to put off the increases.

The new fee structure starting June 1 will temporarily reduce tolls on largely empty containerships and charges for transit reservations. The canal authority said the temporary measures are “designed to help mitigate the impact of the crisis on the Canal’s clients.”

Because of the global economic recession and the resulting slump in trade, the major global shipping lines and shipping organizations have been urging the canal authority to delay the toll increases that went into effect May 1.

But a reduction in tolls on ships in ballast and in reservation fees from June 1 to Sept. 30 of this year are the only concessions the authority was willing to make.

Major container lines have expected some kind of reduction in canal costs. Rodolphe Saade, chief executive vice president of CMA CGM, told The Journal of Commerce last month that the line was in discussions with both the Panama Canal and the Suez Canal authorities about lowering tolls or postponing scheduled toll increases.

“They do understand the situation. It seems that the Panama Canal is ready to make a move, while we have not heard yet from the Suez Authority,” Saade said.

Other container lines have been investigating ways to avoid the tolls altogether. Maersk Line, for example, told The Journal of Commerce that its analysis showed that it could reroute vessels from Asia to the U.S. East Coast around Cape Horn at the southern tip of South America and still save money on the trip by avoiding the Panama Canal tolls, despite the longer route.

The Panama Canal Authority said it will modify the definition of ballast for full container vessels, allowing a ship that carries 30 percent or less of its capacity to be charged the ballast rate of $57.60 per TEU, $14.40 less than the $72 laden (ships with cargo) rate.

It will also reduce the base reservation price depending on the vessel size for all segments that use the reservation system.

For example, it said the base reservation price for a super vessel, with a beam greater than or equal to 100 feet and a length greater than or equal to 900 feet, is reduced by $5,000 per transit.

It is also reducing the fee for late arrivals. Currently, when vessels fail to arrive on schedule, they lose their slot, but have the option to pay an additional charge to keep the reservation and transit that same day. The new temporary measure reduces the charges and provides shipping lines with greater flexibility. The percentage reduction varies depending on the vessel’s arrival time.

The authority said the temporary measures also allow more flexibility for slot substitutions. The canal authority will now allow shipping lines 30 days before the date of a vessel’s transit to request slot substitutions without additional costs.

Previously, shipping lines could make such requests without an additional charge if that request was made at least 60 days prior to the date of transit. The canal authority said this temporary measure grants shipping lines more flexibility for slot substitutions, allowing them to replace one vessel for another with similar dimensions.

Contact Peter T. Leach at pleach@joc.com .