Panama Canal Authority delays toll hikes

Panama Canal Authority delays toll hikes The Panama Canal Authority (ACP) has bowed to industry pressure and decided to delay the implementation of its new toll structure by two months and reopened the issue for public debate.
   The new pricing system, which would see an average increase of 10 percent per year over three years, was first proposed in early February but will now be delayed from May to July. The ACP said it made its decision after meeting with a number of high profile industry groups such as Intertanko and the Connecticut Maritime Association and receiving 21 written submissions from individuals and groups.
   “This open and transparent process has given the ACP an opportunity to further understand the needs of the industry. They told us that they wanted the timeframe for implementation extended, and we listened,” said Alberto Alem'n Zubieta, ACP chief executive officer. “We look forward to continue providing our customers with a safe, reliable and efficient service, at a price that captures the true value of the route and service.”
   The ACP’s proposal to restructure its pricing system and certain regulations reflects an effort toward charging its customers the market price of the canal’s service today, the authority said.
   “As the world becomes more interconnected — barriers dropping, tariffs reduced — the value of the Panama Canal and its role in the global supply chain continues to grow,” ACP said. “Shippers moving goods from the U.S. Gulf Coast to Asia can save up to 10 voyage days via the Panama Canal, and vessels traveling from the West Coast of South America to the U.S. East Coast shave an estimated eight to 16 voyage days compared to alternative routes. Given the cost increases in shipbuilding, fuel and vessel operations, the route through the Panama Canal has significantly increased its value to its users.”
   At the heart of the toll increases, of course, is the canal authority’s need to fund its $5 billion expansion plan, where new locks will be built to handle the world’s largest containerships. Some carriers have expressed dismay at the prospect of increased tolls to fund canal expansion that could benefit future users who don’t even use the canal today.
   But canal representative have argued that the toll, while helping to fund the expansion, merely represents the canal’s true value to carriers.
   The ACP’s board of directors will make a final decision and submit its recommendation to the Cabinet Council of the Republic of Panama after it reviews the latest round of comments received by April 20.