Panama Canal takes steps towards toll increases
The Panama Canal Authority (ACP) held a public hearing in Balboa, Panama, this week on its proposal to restructure the Panama Canal's pricing system.
ACP Administrator/CEO, Alberto Alemán Zubieta, said: "Panama Canal customers and members of the maritime industry were welcomed to participate in a unique, transparent and open process, where customers participating as we set new rates, is rare in the business world. We will seriously study the comments made today, as well as the written submissions."
Zubieta said that as the world became more interconnected, the value of the Panama Canal and its role in the global supply chain would grow. Shippers moving goods from the US Gulf Coast to Asia can save up to 10 voyage days via the Panama Canal.
"The vessels traveling from the West coast of South America to the US 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.
"With globalization, the Canal is an increasingly more important artery in the world's supply chain. Our toll proposal reflects an effort toward charging customers the market price of the Canal's service today. It represents an effort to move to a charge that represents the real value of the service and route," Zubieta said.
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| Panama Canal's pricing system and certain regulations up for changes |
Zubieta said that as the world became more interconnected, the value of the Panama Canal and its role in the global supply chain would grow. Shippers moving goods from the US Gulf Coast to Asia can save up to 10 voyage days via the Panama Canal.
"The vessels traveling from the West coast of South America to the US 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.
"With globalization, the Canal is an increasingly more important artery in the world's supply chain. Our toll proposal reflects an effort toward charging customers the market price of the Canal's service today. It represents an effort to move to a charge that represents the real value of the service and route," Zubieta said.
He said that since the Canal was no longer under US administration it should not be considered a utility.
"We are a business that provides a service to its customers, invests in its future, returns dividends to its shareholders and assumes risk when it makes major enhancements. We appreciate the responses we have received during this transparent process and look forward to continued service to the industry and to the Panamanian people," Zubieta concluded.
The ACP's Board of Directors will review comments received during the official consultation period and will submit its recommendation to the Cabinet Council of the Republic of Panama for approval in the coming weeks.
The ACP proposed the modification of Canal regulations and pricing as follows:
MAXIMUM DISPLACEMENT DRAFT vs. ARRIVAL DRAFT
The ACP is proposing a change for vessels charged based on their displacement to simplify and streamline the process. The Canal proposed that the charge be based upon the maximum displacement instead of the arrival draft.
PASSENGER VESSELS:
The ACP is proposing an assessment of tolls based on maximum berth capacity. In general, under this change, large vessels will be charged tolls on a per berth basis, and smaller ships will continue under the Canal tonnage system. These changes are largely due to suggestions from industry representatives and evidence another example of the ACP listening to the industry.
TOLLS:
The ACP is aware of shipping operators' need of greater stability in the Panama Canal tolls; therefore, this proposal provides advance pricing to 2009 by an increase of 10% each year.
The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal.
The ACP's Board of Directors will review comments received during the official consultation period and will submit its recommendation to the Cabinet Council of the Republic of Panama for approval in the coming weeks.
The ACP proposed the modification of Canal regulations and pricing as follows:
MAXIMUM DISPLACEMENT DRAFT vs. ARRIVAL DRAFT
The ACP is proposing a change for vessels charged based on their displacement to simplify and streamline the process. The Canal proposed that the charge be based upon the maximum displacement instead of the arrival draft.
PASSENGER VESSELS:
The ACP is proposing an assessment of tolls based on maximum berth capacity. In general, under this change, large vessels will be charged tolls on a per berth basis, and smaller ships will continue under the Canal tonnage system. These changes are largely due to suggestions from industry representatives and evidence another example of the ACP listening to the industry.
TOLLS:
The ACP is aware of shipping operators' need of greater stability in the Panama Canal tolls; therefore, this proposal provides advance pricing to 2009 by an increase of 10% each year.
The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal.
Nitya Balagopal | Fri Mar 16 01:02 GMT 2007