Panama Canal Proposes Simplified Toll Structure
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Panama Canal Proposes Simplified Toll Structure

Photo by:   Rykin Katyal on Unsplash
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Antonio Gozain By Antonio Gozain | Senior Journalist and Industry Analyst - Mon, 04/04/2022 - 15:22

The Panama Canal Authority issued a proposal for a comprehensive restructuring of its toll system, which would increase cargo rates as ocean shippers rake in record profits.

Although the Canal’s legacy is already rooted in reliability and resiliency, the new toll structure will allow it to evolve its services through greater collaboration and capacity for customers, said Ricaurte Vásquez Morales, Administrator, Panama Canal. “By making these changes, we recognize the value of extending greater predictability today, while renewing our commitment to improving customer experience,” he added.

The proposed changes would reduce the current toll structure from 430 tariffs to less than 60, providing a simpler value-based pricing structure with greater visibility and predictability, said the Panama Canal Authority. The changes will be implemented gradually starting in Jan. 2023 and will be finished by 2025, “giving customers time to sign their contracts considering the structure,” said Vásquez. After evaluation and further analysis of the proposal, the Cabinet Council of the Republic of Panama will officially approve the modification, says the authority.

The new toll structure includes the following key adjustments:

  • Replacement of toll bands with fixed and capacity tariffs. Ships will pay different fees depending on which set of locks are used.
  • A fixed tariff per transit.
  • A capacity tariff per vessel type and size.
  • Replacement of tariffs for vessels in ballast. Vessels transiting in ballast will pay a percent of the regular laden toll independent of the market segment and the special return trip tariffs for container and liquefied natural gas vessels will be phased out.
  • Modifying the loyalty program. The Canal authority seeks to simplify the loyalty program for container vessels by reducing the number of categories from six to one.

The proposed changes acknowledge the importance of the Panama Canal within today’s new trade landscape and the new structure will foster greater continued collaboration with customers, said the authority.

“Our ability to maintain a safe, reliable route amid rising climate and supply chain challenges hinges on making strategic investments and adjustments to our business structure today,” said Victor Vial, Vice President of Finance, Panama Canal. “Ground-breaking investments are already underway to capitalize on these changes and strengthen the Panama Canal’s role in connecting smarter, more sustainable supply chains,” he added.

In addition, the Panama Canal is planning a US$2 billion investment in water projects and “will pursue additional investments in digital transformation, infrastructure maintenance” and equipment to become carbon neutral by 2030, said the authority.

Inaugurated in 1914, the Panama Canal plays a key role in Americas’ trade, including Mexico’s activities. In 2018, Mexico was positioned within the three main global users of the Canal for the first time in 114 years. From Oct. 2017 to Sept. 2018, Mexico moved 30.42 long tons through the Canal, from which 7.74 originated form Mexican ports and 22.69 were destined to one of those ports, reported El Universal.

Photo by:   Rykin Katyal on Unsplash

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