Proposed modifications to the Panama Canal rate structure could ultimately lower rates for containerships, but raise them for LPG and LNG tankers.
The Panama Canal Authority (ACP) on Wednesday held a public hearing on a proposal that would modify its toll structure, following a 32-day formal consultation period for industry feedback.
The proposed modifications, which could ultimately lower rates for containerships, but raise them for liquefied petroleum gas (LPG) and liquefied natural gas (LNG) tankers, were first announced June 1.
According to the ACP, they were proposed after an analysis of the current utilization and productivity of the Neopanamax Locks, as well as meetings with Panama Canal executives, customers and industry representatives in Europe, Asia and North America. The meetings, according to the authority, provided a deeper understanding of the industry today, the challenges faced by individual market segments, and the projected demand for the Neopanamax Locks.
The toll modifications would offer better rates per loaded container on the return voyage, but only for Neopanamax vessels deployed on the canal route in both the head and back haul legs. Containerships would only receive the new rates if they follow mandated standards, including that the utilization rate for a ship’s northbound transit is greater than or equal to 70 percent and the time between the northbound and southbound transit is no longer than 25 days.
And although, rates for LPG and LNG vessels would be modified, the units of measurement would not change. The vessels would be reclassified as “container/breakbulk” within the “general cargo” segment, rather than in the “others” segment as they are currently.
“The modified tolls will safeguard the canal’s competitiveness, charge a fair price for the value of the route and provide a competitive service to the global shipping industry,” Panama Canal Administrator Jorge L. Quijano said in a prepared statement. “The public hearing is a key part of the tolls modification process, which ensures all interested parties can provide feedback for consideration.”
ACP has said that all comments received during the July 5 public hearing, as well as in writing, would be evaluated and analyzed by its board of directors, which would then submit its recommendation to the Cabinet Council of the Republic of Panama for official approval. A final decision would then be announced to the shipping community.
No timeline has been given by the authority regarding the process, however, nor any indication of when the final decision might come.