February 6th 2015
Liner operators transiting the enlarged Panama Canal are set to be incentivized to use their largest boxships.
The Panama Canal Authority (ACP) is seeking to lure back defecting lines by providing a financial incentive for larger ships using the expanded waterway.
Under a proposed new toll system to take effect at the expected opening of the new locks in 2016, vessels of over 9,000 teu will be charged less per container than ships under 6,000 teu, with the smaller vessels encouraged to keep using the existing canal system.
The Panama Canal has been losing revenues from container operators in recent years, especially from those serving the Asia-to-US East Coast (USEC) leg that have switched to the longer but cheaper route via Suez.
Panama is seeking to stop the drop-off by applying discounts to vessels carrying volumes above certain thresholds.
The sliding-scale toll fee, to be introduced in April next year, will price the nominal capacity of ships as well as the number of loaded containers.
The new toll benefits owners of post-panamax vessels – sometimes called neo-panamaxes – with a beam of up to 49 meters and a draught of up to 15.24 meters. The owner of a 10,000-teu vessel with 80% utilization can expect to save $24,000 per transit, paying $780,000 under the new toll structure.
But the owner of a 4,700-teu panamax will fork out $38,000 more – or $432,000 in total – to use the canals new locks and will find it cheaper to pass through the existing locks.
Containerships are crucial to the ACP, contributing just over half – 50.7% – of toll revenues from 2010 to 2014. Yet in recent years, the waterway has suffered as lines sought alternatives. Evergreen suspended one of its Asia-to-USEC services after joining the CKYHE network, while members of the G6 Alliance temporarily merged two of their Asia-to-USEC schedules for a number of months over the low season.
Lines trading from Northeast Asia and the USEC are the main clients, with 11 direct services and two pendulum services, representing 52% of nominal capacity transiting the canal.
Some 27 liner services are using the waterway but the ACP remains concerned that traffic and toll fees will shrink by up to 7.5% in 2015.
Panama is counting on an increase in the number of larger vessels using the new locks in 2016, with an increasing number of post-panamaxes and fewer panamaxes. It expects to bring in a loyalty programme based on the numbers of containers transited, which will further reduce the toll fee.
“By establishing a tariff differentiation for the vessels based on the use of the panamax and neo-panamax locks, the new toll proposal seeks to encourage an increase in the size of the vessels that currently transit the Panama Canal, taking advantage of the economies of scale that the neo-panamax locks will offer the maritime industry,” the ACP said in a proposal document.
“At the same time, it improves the canal route competitiveness levels for the main trade routes, promoting the increase of cargo volumes and utilization levels.”
The proposed toll will be discussed in a public meeting on 27 February in Balboa, Panama, to be moderated by ACP directors Jose Sosa and Ricardo de la Espriella.