Shipping industry comments on proposed Panama Canal toll hikes

Cruise ship transiting Panama Canal

The Panama Canal Authority (ACP) is conducting a public consultation on a proposal to adjust the Panama Canal tolls for containerships, vehicle carriers, dry bulk carriers, tankers, chemical carriers, LPG and LNG vessels, passenger vessels and small vessels. The proposed new toll charges are anticipated to enter into effect on January 1, 2020, the same day as the IMO Global Sulfur Cap regulation.

The International Chamber of Shipping (ICS), the Asian Shipowners’ Association (ASA) and the European Community Shipowners’ Associations (ECSA) are the principal global and regional trade associations for shipowners and operators, representing all sectors and trades including containership operators, tanker operators and dry bulk carriers, as well as specialised trades such as LPG/LNG carriers, chemical carriers, passenger vessels and vehicle carriers.

The membership of ICS, ASA and ECSA combined represents more than 90% of the world’s merchant tonnage.

Following is a summary of the shipping industry’s submission:

• The ACP should seriously consider providing a twelve-month notice period to allow shipowners and operators to adjust to any future modifications to toll charges more effectively.
• The ACP is requested to postpone any approved new toll increases by at least six months (June 2020), in light of the anticipated impact of the IMO 2020 Global Sulfur Cap regulation, which enters into effect on the same day as the proposed new tolls (January 1, 2020).
• Further consideration should also be given to other factors that are expected to continue to negatively impact the commercial performance of the industry in 2020, including rising geopolitical instability; increased economic uncertainty due to the rise of protectionist trade measures worldwide; and ongoing escalation of trade disputes and increase in trade tariffs between major trading nations.
• The economic sustainability of the Panama Canal is inextricably linked to that of shipowners and operators that use the Canal. In this respect, the proposed new toll increases could significantly undermine future trade growth.
• There should be no distinction in the level of toll charges between Panamax vessels and Neopanamax vessels.
• The market remains difficult for the segments facing proposed toll increases (e.g. dry bulk carriers), any such increase in charges would exacerbate the already volatile operating conditions.

For the full submission please visit the ICS website: http://www.ics-shipping.org/submissions/other