Because of increasing global temperatures and decreasing precipitation in the Panama Canal watershed, the Panama Canal Authority (ACP) announced late Monday a new freshwater fixed fee of USD $10,000 for ships over 38.1 meters.
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The fee affects all tankers, dry bulk carriers, container ships and LPG ships, and goes into effect February 15.
Another fee will be added, ranging from 1% to 10% of the vessel's toll, which will depend on the level of the Gatun Lake at the time of transit. Official lake levels will be published daily and forecast for the following two months, according to the ACP.
A separate vessel visit creation fee (ETA handling fee) will be introduced and applied for all bookings at their time of creation. Vessels 91 feet in beam and over will be charged $5,000, while vessels over 125 LOA (38.1 meters) but less than 91 feet (27.74 meters) in beam will be charged $1,500. The ACP announced that the fee is nonrefundable after scheduling, even if the transit booking is canceled.
Market sources said VLGC use of the Panama Canal would continue but expected the largest impact would likely be felt when canceling a booking -- or a reserved canal transit slot -- as the freshwater fee will not be refunded.
"If you are going to the Far East, it will still be the canal. If it is southeast Asia, it will be the cape," a trader said, referring to the Cape of Good Hope.
For clean petroleum product tankers in the Americas, the new fee could mean a change in pricing structures for spot trades from the US Gulf Coast to West Coast South America and the Far East.
"At the very least for Medium Range, each transit will be USD $11,500 more," a clean tanker owner said Tuesday.
On top of the initial fee, the same owner estimated for a ballast leg, the added cost for the Gatun Lake level fee could range from $12,500 to $21,500 more per transit, and for laden legs the cost could range from $12,730 up to $23,800 more per transit.
Clean tanker owners and brokers expected the Worldscale Association could adjust rates to accommodate the new fees.
"Worldscale will have to adjust differentials upwards to compensate for increased costs. Those that fix lump sum better calculate upwards when offering or fixing," a clean tanker shipbroker said.
A second owner suggested that, when offering for a cargo intended to transit through the canal, owners could ask for a Panama Canal clause in spot negotiations.
Handysize/Medium Range tankers typically have LOAs over 150 meters. The smallest bulkers, Handysize, typically have LOAs of 70 meters, and Panamax container ships typically have an LOA of just under 300 meters. For LPG ships, Very Large Gas Carriers typically have an LOA of 225 meters or more.