Shipping industry condemns “opportunistic” Panama Canal toll increases

Shipping industry condemns “opportunistic” Panama Canal toll increases

Shipping industry condemns “opportunistic” Panama Canal toll increases

   Representatives of the international shipping industry are attending a meeting today with officials of the Panama Canal Authority (ACP) to warn them that they regard the proposed additional toll charges for containerships as unrealistic, excessive and opportunistic.
   Officials of the London-based International Chamber of Shipping and the Washington-based World Shipping Council are thought to lead a campaign by containership operators to oppose the ACP’s proposed large increases in toll rates for containerships.
   The revised tariff proposal published by the authority sets a toll rate of $42 per TEU, effective from May 1, increasing to $49 per TEU on Jan. 1, 2006 and to $54 on Jan. 1, 2007. The tariff also applies the charges in full, for the first time, to containers loaded on deck. Deck container capacity has been charged 8 percent of the regular toll tariff until now.
   The International Chamber of Shipping will tell the ACP that the $42 charge differs from a figure of $40 informally discussed between the World Shipping Council and the authority during earlier consultations.
   “Whereas the figure of $40 per TEU was based on an arithmetical calculation, no attempt has been made to put forward a measurement-related rationale for these higher figures, a circumstance distinctly at odds with the transparency with which the ACP sought to justify $40 to the industry,” the International Chamber of Shipping said.
   Shipping companies say the increases would represent a 68.75 percent increase over current toll charges.
   “The ACP may argue that container vessels are today not paying their full charge by comparison with other classes of vessel, but that argument is academic when viewed against a toll increase in absolute terms of many tens of thousands of dollars per transit,” the International Chamber of Shipping said.
   The ACP, which considers that it has offered canal transit services at prices below their market value and is considering a program of expansion of the canal, has asked users to comment on its tariff proposals.
   “If the ACP wishes to be seen as a commercially minded organization, it must also reflect on the realities of the commercial process, and on the acceptability to the consumer — in this case the canal user — of price increases which appear to owe less to justified need than to opportunism and an essentially captive market,” the International Chamber of Shipping complained.
   Shipping lines are also asking the canal to lower proposed charges, or waive charges, for empty containers loaded on deck because they do not earn cargo revenues.
   Yet, container shipping lines are in a weak negotiating position because of the growing demand from shippers to add Asia/U.S. East Coast services via the Panama Canal.