The Panama Canal Authority (ACP) will postpone the planned price increase for transit booking fees that was to take effect on April 15 this year.
The ACP made the last-minute announcement in a Notice to Shippers issued on April 13.
According to the International Chamber of Shipping, the proposed changes represent a minimum increase in transit booking fees of $20,000 (up 57%) and a maximum increase of $58,500 (up 167%). The ACP says they will now begin to be implemented on June 1, 2021, giving the maritime industry more time to prepare for the adjustment to the new booking rates.
The ACP’s announcement follows a joint letter sent by the International Chamber of Shipping (ICS), the Asian Shipowners’ Association (ASA) and the European Community Shipowners’ Association (ECSA), expressing concern about the speed of the price increases that were expected to begin from April 15, 2021.
The letter, sent on March 17, 2021, expressed concern over the “significant increase” in rates and stated that the April 15 start date given by the ACP was too soon for the maritime industry and canal users to adjust. The ACP has linked the rate increase to the changing conditions of supply and demand for the service it offers.
“We appreciate that the rate change is designed to adapt to changes in supply and demand for Panama Canal service and look forward to establishing a productive dialogue with the ACP to develop a long-term pricing strategy that provides the industry with predictability in transit cost,” said ICS secretary general Guy Platten. “We look forward to holding a virtual meeting with the ACP to discuss and gain further clarity on these issues.”
The Panama Canal is one of the busiest shipping lanes in the world. It has historically handled about 5% of world trade and recorded nearly 14,000 vessel transits in 2020. Container shipping, its largest user, accounts for about 35% of the total tonnage passing through the canal.
Asia Shipowners Association (ASA) secretary general Yuchi Sonoda welcomed the postponement decision.
“ASA appreciates that the ACP continues to review the voices of canal users in its future operations and management based on greater economic stability and transparency,” Sonoda said.
The ACP’s announcement comes as a relief to the maritime sector, which continues to weather the crew turnover crisis, port congestion and other disruptions related to the COVID-19 pandemic.
Martin Dorsman, Secretary General of ECSA, said, “On behalf of European shipowners, I welcome the ACP’s decision to postpone the implementation of the new booking fees. Especially in these times of great uncertainty, it is important that the shipping industry can better prepare for these changes. We appreciate the good cooperation with the ACP and look forward to continued dialogue.”