Panama Canal Authority postpones planned price hike to relief of shipping industry

Panama Canal Authority postpones planned price hike to relief of shipping industry
The new fees will come into place June 1

The Panama Canal Authority (ACP) has postponed price increases on canal transit reservation system fees, which were due to come into effect on April 15, 2021, in light of industry concerns.

A joint letter sent by the International Chamber of Shipping (ICS), Asian Shipowners’ Association (ASA) and European Community Shipowners’ Association (ECSA) expressed concerns over the “significant increase” of the fees.

The proposed changes represent a minimum cost increase per transit reservation of US$20,000 (up 57%) and a maximum cost increase of US$58,500 (up 167%) and will now start on June 1, 2021.

Panama Canal administrator Ricuarte Vásquez Morales said: “The Panama Canal values its customers’ input, as it looks for ways to bring value and improve our services on a constant basis.

“We always take into account how the changes we make may affect our customers and will work alongside them to ensure that their feedback is heard, and our goals aligned.”

The letter, sent on March 17, stated that the April 15 start date given by the ACP was too short for the maritime industry and canal users to be able to adjust.

Panama Canal is one of the world’s busiest shipping routes, with nearly 14,000 transits made last year, and the ACP has linked the increased fees to changing supply and demand condition for the service it offers.

The ACP announced the postponed date for the new booking tariffs, offering the maritime industry more time to prepare for the adjustment to the new booking fees.

ICS Secretary General Guy Platten said: “We are reassured to see that ACP has responded to industry’s calls to postpone its proposed transit reservation price increases until June 1, giving industry time to fully prepare for these changes.

“The increases represent a significant rise in cost, especially considering the ongoing economic impact of the COVID-19 pandemic.”

The transit reservation system is an optional service offered by the Panama Canal that gives customers the possibility to transit on a specific date through the payment of an additional fee, thus guaranteeing transit.

The Panama Canal stated that it has continuously implemented measures to improve the quality of its service and adapt to an ever-changing market, including initiatives that offer better or more effective ways to schedule transits.

Platten continued: “We appreciate that the fee change is designed to adapt to changing supply and demand for the Panama Canal’s service and we look forward to establishing a productive dialogue with the ACP to develop a long-term pricing strategy to provide industry with predictability on transit cost.”

ASA secretary general, Yuichi Sonoda, expressed his gratitude toward the ACP for taking the maritime industry into consideration and added that he hoped ACP will continue to review on the voices of canal users in their future canal operations.

Martin Dorsman, secretary general of ECSA, also welcomed the decision to postpone the new booking fees.

“Especially in these times of high uncertainty, it is important for the shipping industry to be able to better prepare for these changes,” he added.