Dive Brief:
- The Cabinet Council of the Republic of Panama approved a new toll structure for the Panama Canal, according to a recent press release, set to begin October 1, 2017.
- The new structure rewards vessels carrying liquefied natural gas, liquid petroleum gas, and breakbulk vessels with more appealing tariff rates.
- It also rewards Neopanamax ships on return voyages, so long as they traverse the Canal again within 28 days of their voyage, not including time spent at Canal facilities.
Dive Insight:
When the Panama Canal opened its new locks to Neopanamax ships last year, it opened the possibility for carriers to schedule around-the-world voyages with the larger ships.
In theory, a ship can now begin its journey in Beijing, call upon the U.S. East Coast in one journey, before setting sail from the U.S. back to Asia through the Suez Canal. As a result, the new locks also placed the Panama Canal in direct competition with the Suez Canal, and the two waterways have been indirectly competing for service. In just a few examples, the Panama Canal has also created programs to reward sustainable vessels, while the Suez Canal is issuing a sort of credit line to carriers for repeated use of the Waterway.
The new toll structure, depicted in the chart below, shows the Panama Canal seeks to incentivize carriers to schedule more round-trip voyages.
The change may benefit shippers just as much as carriers: Even an empty voyage back would return containers to their source, meaning shorter waits for equipment in export-heavy ports. While a simple toll change will unlikely affect rates or re-balance container availability, it does provide an incentive for carriers to modify their behavior.
